Abstract
This study evaluates the effectiveness of microfinance policy in Nigeria from 2010 to 2017. The Study used AMJU Microfinance Bank as its sample and the objectives of the study are to examine appropriate client targeting mechanisms that enhance good microfinance practice aimed at poverty reduction and how client impact evaluation improves operational efficiency and effectiveness. Propensity Score Matching (PSM) technique of micro econometric framework was used to establish the counterfactual for participants. The fundamental evaluation problem of selection bias was treated in the study and primary data obtained through interviews were analysed. The findings show that microfinance client exist rate was on the increase for established clients being significant; and client loan size dissatisfaction for older clients was on the rise and customers that have benefited from micro-credits were better-off than non-beneficiaries. The study concludes that Microfinance is effective in poverty reduction and recommends amongst others that the delivery methodology should be tailored after their operational strategy and target clients; and also, appropriate feedback mechanism be built into their product and services delivery to encourage impact evaluation of participants’ responses, thereby, providing relevant inputs for the formulation of effective National Microfinance Policy in Nigeria. Keywords: Microfinance, National Microfinance Policy, Financial Services, Financial Development Classification: Finance, Micro-credit DOI : 10.7176/JESD/11-2-03 Publication date: January 31 st 2020
Highlights
1.1 Background to the Study There has been a growing interest towards recognizing the need to extend financial services freedom to the poor to enable them pursue legitimate economic diversification geared towards survival as well as improving their economic goals
The primary objective of this study is to evaluate the effectiveness of microfinance policy in Nigeria, studying one of the vibrant performing microfinance institution, AMJU Unique (MFB) Ltd
microfinance industry (MFI) should conduct their operations using a combination of delivery methodology that differentiates among the macroeconomic environment including spatial dispersion of population and other microfinance – driven characteristics
Summary
The primary objective of this study is to evaluate the effectiveness of microfinance policy in Nigeria, studying one of the vibrant performing microfinance institution, AMJU Unique (MFB) Ltd. 2.4 Poverty Alleviation Programme Two ways by which the provision of financial services in general and microfinance in particular can have impact on poverty was included in the 2010/2011 world development report, known as the income-generating effect which enhances the poor economies through investment in assets that are affordable. This helps to upgrade the family www.iiste.org from stable below poverty line to stable above poverty line (Osthoff, 2005) and the vulnerability effect in which families are able to reduce the effects of income fluctuations thereby enhancing consumption smoothening and other coping strategies.
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