Abstract
In order to alleviate poverty and improve the living standard of the people of South-West Nigeria, it is imperative that micro/small financial services such as credit, insurance, money transfer, etc. are provided in order to engage them actively in productive activities. Globally, there are several failed policies by governments, particularly in Nigeria over the years aimed at poverty alleviation. This study examines microfinance scheme towards the dispersion of credit amongst the working poor; draws from the data collected from field survey and these were reported using tables, frequency counts and cross-tabulations to draw inferences and a loan demand model was specified and estimated using the Ordinary Least Squares (OLS) econometric technique.The study used cross-sectional data collected from selected respondents in selected areas of both the Lagos and Ogun States of Nigeria respectively. The study found that majority of the Microfinance banks in Nigeria are model after the Grameen Bank which is aimed at the poor and people with basic, little or no education and that loan demand is interest rate insensitive. Therefore, MFIs should design appropriate products that are flexible enough to meet the different needs of the poor for both production and consumption purposes. Besides, governments (local, state and Federal) should urgently tackle the infrastructural gaps such as electricity, water and efficient transportation system which impact greatly on the standard of living of the people.Int. J. Soc. Sc. Manage. Vol. 3, Issue-4: 256-266
Highlights
Microfinance deals with the provision of financial services, such as loans, savings, insurance, money transfers, and payments facilities to income groups in the lower cadre, (Awojobi, 2014)
Very few of them possess post-secondary education. This confirms that most of the microfinance institution (MFIs) in Nigeria is built after Grameen Bank model which focuses on poor people with little or no education 3) It was established, that loan demand is interest rate insensitive
It is the availability rather than the cost of loan that influences the volume of loan demanded and received by the customers of MFIs. 4) On this aspect of the study, the result obtained showed that all the MFIs have granted N9.1 million, N6.5 million and N4.9 million in each of the three loan categories respectively
Summary
Microfinance deals with the provision of financial services, such as loans, savings, insurance, money transfers, and payments facilities to income groups in the lower cadre, (Awojobi, 2014). It could be used for productive purposes such as investments, seeds or additional working capital for micro enterprises. Microfinance is no longer an experiment or a wish, it is a proven success It has worked successfully in many parts of the World – Africa, Asia, Latin-America, Europe and North America. The key issues in Microfinance include the realization that the poor need a variety of financial services, including loans, savings, money transfer and insurance which Microfinance provides. Microfinance involves building of financial sub-system which serves the poor and its architecture could be integrated into the financial system of the nation (Ihyembe, 2000)
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