Reasons for low patronage of microfinance banks by women entrepreneurs in nigeria

Ademola A.O,Akanbi T.A,Kazeem B.L.O,Adegboyegun A.E

doi:10.26524/jms.10.5

Abstract

That microfinance banks are established to improve the socio-economic conditions of women especially in rural areas is a well-known fact, however in recent times, women entrepreneurs in Nigeria are no longer patronizing Microfinance banks like before. This calls for a research into factors responsible for low patronage of Microfinance banks by women entrepreneurs in South West Nigeria. The study employed Average Gross Turnover, Factor Analysis, Goodman and Kruskal’s gamma statistics to evaluate the effect of Microfinance banks on performance of women entrepreneurs and to determine the reasons for low patronage of Microfinance banks by women entrepreneurs. The result showed that weak but positive relationship exist between Microfinance banks and performance of women entrepreneurs. It was also observed that harsh loan recovery methods, high interest rates, short repayment periods and high charges imposed on customers are major reasons for low patronage of Microfinance banks by women entrepreneurs in Nigeria. It is recommended that Microfinance banks should reduce their interest rates drastically and lengthen the repayment periods so as to encourage women to patronize them more and to improve their performances.

Highlights

Women play pivotal role in the socio-economic development of their families and communities but certain problems such as poverty, unemployment, low household income and societal discriminations mostly in developing countries have obstructed their performance
The enterprises surveyed showed a steady rise in gross turnover but when the rate at which the gross earnings rose between 2016 and 2017 was compared with the rate at which they rose between 2017 and 2018, it was discovered that the performance of the enterprises improved slightly despite the injection of micro credit
The respondents asserted that this may be due to high interest rate demanded by Micro-finance banks (MFBs) and they attributed their poor performances to the short repayment period which did not give them enough room to generate futuristic profits and allow the loans to be used judiciously

Summary

Introduction

Women play pivotal role in the socio-economic development of their families and communities but certain problems such as poverty, unemployment, low household income and societal discriminations mostly in developing countries have obstructed their performance. Bamisile [21] and Arogundade [22] indicated that a number of micro credit programmes are not making any significant impact with regards to the overall welfare of women and have been far removed from the customary and operational framework of the rural financial intermediation process ,[23] observed that microfinance borrowers have had to sell their household assets or their own food supplies, some even beg for alms around the neighborhood in order to meet up with the short time for repayment of loans..

Results

Conclusion