Abstract
Microfinance was introduced in Nigeria in 2005 to give microcredit to the poor, especially the petty traders. This was to allow them to expand their businesses, increase sales and earn income. This study systematically assessed the impact of the microcredit in poverty reduction. A systematic search for quasi-experimental, observation and comparative studies published between 2008 and 2018 was conducted in five literature databases, lists of relevant studies and websites. Both qualitative and quantitative studies were included in the review and their quality assessed. Inclusion criteria were met by twenty studies. These studies showed how microcredit influence poverty reduction among petty traders who are beneficiaries of microcredit. Among these studies, fourteen focused on microfinance and poverty reduction and seven dealt with microcredit and poverty alleviation. Most studies were quantitative, eight had mixed methods and one had a qualitative analysis. Among the included studies, nineteen supported the hypothesis that microcredit contributes to poverty reduction and only one study objected to this hypothesis. While the findings of this review have revealed that microcredit is a strategy for poverty reduction, there are some challenges that hinder the accessibility to microcredit. This calls for government actions to review its microcredit policy.Keywords: Microcredit, Microfinance, Nigeria, Poverty reduction
Highlights
IntroductionThe present democratic dispensation avails successful governments to initiate different poverty reduction strategies to checkmate the rising poverty in Nigeria
Poverty is real in Nigeria and new data from the Brookings Institute revealed that Nigeria is the world capital of people living in extreme poverty
A total of 20 research articles met the criteria of the systematic review, 14 focused on microfinance and poverty reduction and the other
Summary
The present democratic dispensation avails successful governments to initiate different poverty reduction strategies to checkmate the rising poverty in Nigeria. One of this anti-poverty reduction strategies is microcredit that is given to petty traders to support entrepreneurship and reduce poverty. The evidence attached to microcredits in reducing poverty prompted the Nigerian government to introduce microfinance institutions in 2005 (Awojobi, 2014). This is to allow many of the poor informal workers to have access to microcredit to fortify their business, Oladayo Nathaniel Awojobi, Department of Social Security Bonn-Rhein-Sieg University of Applied Sciences Sankt Augustin, Germany
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