Abstract
In this study, Difference-in-Differences methodology was used to assess the impact of microfinance loan on rural poor in Nigeria. The sample is classified into four groups: the microfinance loan beneficiaries (treatment group) before obtaining the loan and after the programme implementation. Likewise the non-beneficiaries (control group that were also qualified but could not get the loan) were considered before their application for the loan and after the programme was implemented. The result revealed that microfinance loan has favourable contributions to poverty alleviation in the study area. However, there is still need for government aid in order to make the poor people benefit more from the microfinance programme and enhance economic development. Government should support the MFIs with funds that would be disbursed at concessionary interest rates. In addition, provision of more physical, social and economic facilities would encourage the establishment of more MFIs in the rural areas . Keywords: economic development, poverty, microfinance, difference in differences, Nigeria DOI: 10.7176/JESD/11-16-06 Publication date: August 31 st 2020
Highlights
No meaningful economic development can be achieved without adequate policies and programmes that will empower the poor to have their means of livelihood
This is in line with the assertion that there is no justification for any country to be regarded as progressing or advancing when majority of her citizens are languishing in poverty and hunger
Analysis and Discussion The estimated results indicate that the coefficient of Tistatus (DID estimator to explain the impact of microfinance loan before and after the treatment) has positive sign with poverty alleviation and is significant at 1 percent level
Summary
No meaningful economic development can be achieved without adequate policies and programmes that will empower the poor to have their means of livelihood. This is in line with the assertion that there is no justification for any country to be regarded as progressing or advancing when majority of her citizens are languishing in poverty and hunger. The consequences of poverty are dehumanizing, devastating and traumatic Realizing this phenomenon, development institutions like World Bank, United Nations (UN) and International Monetary Fund (IMF) instigated the development of various projects and programmes that would contribute to the improvement of the life of the poor, by ensuring health improvement and sustainable growth and development (Ssewamala,Sperber,Zimmerman & Karimli, 2010)
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