Micro Financing as Strategy for Poverty Alleviation and Economic Empowerment in Osun State, Nigeria

Jones Olasimbo Clement

doi:10.7176/ejbm/11-5-06

Abstract

The focus of this study is to examine the Impact the micro loans being granted by Nigerian Financial Institutions have on the poverty level and the empowerment of the people of Osun State of Nigeria as evidenced from selected Financial Institutions in Osun State. The methodology adopted was descriptive survey research method; this method of research was used in order to analyze microcredit and loans from financial institutions that serve as catalyst for economic growth and reduction in poverty level in the State. The population of the study is financial institutions in Osun State; 5 commercial and 5 micro finance banks were selected, using simple random sampling procedure. 10 staff was administered questionnaire in each bank, making 100. However, 85 questionnaires were properly returned and accounted for, while 15 were unreachable. Simple regression analysis was used to test hypothesis in order to determine the degree of connections between the variables with the aid of Statistical Package for Social Science (SPSS) version 23. Findings show that availability of microcredit is statistically significant in predicting the dependent variable (reducing poverty). Keywords : Strategy, Financial Institutions, Commercial Banks, Microfinance Banks, Microcredit, Poverty Reduction. Economic Empowerment. DOI : 10.7176/EJBM/11-5-06

Highlights

IntroductionIn Nigeria, as around the World, most micro-financing can be grouped in three areas: financial services (loans, deposits, leasing, etc.), non-financial services (classes on literacy, numeracy, health, nutrition, etc.) and business development
In Nigeria, as around the World, most micro-financing can be grouped in three areas: financial services, non-financial services and business development
This paper examined the contributions of Nigerian banking industry towards poverty reduction

Summary

Introduction

In Nigeria, as around the World, most micro-financing can be grouped in three areas: financial services (loans, deposits, leasing, etc.), non-financial services (classes on literacy, numeracy, health, nutrition, etc.) and business development. Micro-enterprises or small businesses are important in situations where economic and social environments have had a disappointing effect on the people, so that the poor can survive under microfinancing. These small businesses play a great role in providing jobs thereby contributing positively to the GNP - Gross National Product. The enabling environment is still lacking in Africa to make this function well

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