IDEAS home Printed from https://ideas.repec.org/a/khe/scajes/v5y2019i2p114-119.html
   My bibliography  Save this article

Analysis of the Effect of Microfinance Institutions on Poverty Reduction in Nigeria

Author

Listed:
  • Ehiabhi Andrew Tafamel

Abstract

Credit inaccessibility constitutes a major hindrance to business growth in Nigeria, where a large majority of micro and small business owners do not have adequate collateral to secure a loan. This study examined the effect of microfinance institutions on reduction of poverty as well as entrepreneurial activities in Nigeria. The study employed a survey research instrument through the administration of questionnaires to two hundred (200) micro and small-scale business enterprises in Ikpoba Okha Local Government Area of Edo State, Nigeria. The study adopted Pearson correlation, multivariate regression techniques, Heteroskedasticity diagnostic test and Ramsey RESET test for data analyses. The results showed that microfinance institution and poverty alleviation were positively and significantly related while entrepreneurial activity and poverty reduction were positively and insignificantly related. The study recommended that microfinance institutions should be given a conductive environment to operate in order to assist in developing micro and small business enterprises, thereby help mitigate the effect of poverty ravaging the Nigerian society.

Suggested Citation

  • Ehiabhi Andrew Tafamel, 2019. "Analysis of the Effect of Microfinance Institutions on Poverty Reduction in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(2), pages 114-119, June.
    • Handle: RePEc:khe:scajes:v:5:y:2019:i:2:p:114-119
    as

    Download full text from publisher

    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_254.pdf
    Download Restriction: no
    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_254.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
    2. von Thadden, Ernst-Ludwig, 2004. "Asymmetric information, bank lending and implicit contracts: the winner's curse," Finance Research Letters, Elsevier, vol. 1(1), pages 11-23, March.
    3. Gries, Thomas & Naudé, Wim, 2011. "Entrepreneurship and human development: A capability approach," Journal of Public Economics, Elsevier, vol. 95(3), pages 216-224.
    4. Ephraim W. Chirwa & Montfort Mlachila, 2004. "Financial Reforms and Interest Rate Spreads in the Commercial Banking System in Malawi," IMF Staff Papers, Palgrave Macmillan, vol. 51(1), pages 1-5.
    5. repec:cto:journl:v:24:y:2004:i:3:p: is not listed on IDEAS
    6. Christopher J. Coyne & Peter T. Leeson, 2004. "The Plight of Underdeveloped Countries," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 235-249, Fall.
    7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    8. Awojobi, Omotola & Bein, Murad, 2010. "Microfinancing for Poverty Reduction and Economic Development; a Case for Nigeria," MPRA Paper 33530, University Library of Munich, Germany, revised 11 Apr 2011.
    9. Mejeha, Remy O. & Nwachukwu, Ifeanyi N., 2008. "Microfinance Institutions in Nigeria," MPRA Paper 13711, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Collin Chikwira & Edson Vengesai & Petronella Mandude, 2022. "The Impact of Microfinance Institutions on Poverty Alleviation," JRFM, MDPI, vol. 15(9), pages 1-13, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Urbano & David Audretsch & Sebastian Aparicio & Maria Noguera, 2020. "Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment," International Entrepreneurship and Management Journal, Springer, vol. 16(3), pages 1065-1099, September.
    2. Wim Naudé, 2008. "Entrepreneurship in Economic Development," WIDER Working Paper Series RP2008-20, World Institute for Development Economic Research (UNU-WIDER).
    3. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    4. José Renato Haas Ornelas & Alvaro Pedraza & Claudia Ruiz-Ortega & Thiago Christiano Silva, 2021. "Credit Allocation When Private Banks Distribute Government Loans," Working Papers Series 548, Central Bank of Brazil, Research Department.
    5. Reto Wernli & Andreas Dietrich, 2022. "Only the brave: improving self-rationing efficiency among discouraged Swiss SMEs," Small Business Economics, Springer, vol. 59(3), pages 977-1003, October.
    6. Ghosh, Saibal, 2019. "Loan delinquency in banking systems: How effective are credit reporting systems?," Research in International Business and Finance, Elsevier, vol. 47(C), pages 220-236.
    7. Helmut Fryges & Sandra Gottschalk & Karsten Kohn, 2010. "The KfW/ZEW Start-up Panel: Design and Research Potential," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 130(1), pages 117-132.
    8. Erik Canton & Isabel Grilo & Josefa Monteagudo & Peter Zwan, 2013. "Perceived credit constraints in the European Union," Small Business Economics, Springer, vol. 41(3), pages 701-715, October.
    9. Beck, Thorsten & Hesse, Heiko, 2006. "Bank efficiency, ownership, and market structure : why are interest spreads so high in Uganda ?," Policy Research Working Paper Series 4027, The World Bank.
    10. Niinimäki, J-P., 2019. "Credit markets under asymmetric information regarding the law," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 380-390.
    11. Jon H. Findreng, 2021. "Peer Monitoring vs. Search Costs in the Interbank Market: Evidence from Payment Flow Data in Norway," Working Paper 2021/2, Norges Bank.
    12. Suting Hong & Robert M. Hunt & Konstantinos Serfes, 2018. "Dynamic Pricing of Credit Cards and the Effects of Regulation," Working Papers 18-23, Federal Reserve Bank of Philadelphia.
    13. Hans Degryse & Vasso Ioannidou & Erik von Schedvin, 2016. "On the Nonexclusivity of Loan Contracts: An Empirical Investigation," Management Science, INFORMS, vol. 62(12), pages 3510-3533, December.
    14. Mirjam Praag & André Stel, 2013. "The more business owners, the merrier? The role of tertiary education," Small Business Economics, Springer, vol. 41(2), pages 335-357, August.
    15. Kirschenmann, K., 2010. "The Dynamics in Requested and Granted Loan Terms when Bank and Borrower Interact Repeatedly," Other publications TiSEM 300df022-4701-4773-a8b7-c, Tilburg University, School of Economics and Management.
    16. Saba Nasir, 2022. "Entrepreneurship Opportunities and Challenges to Overcome Recession from Economy," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(1), pages 1-5, March.
    17. Song Zhang & Liang Han & Konstantinos Kallias & Antonios Kallias, 2022. "Bank switching of US small businesses: new methods and evidence," Review of Quantitative Finance and Accounting, Springer, vol. 58(4), pages 1573-1616, May.
    18. Kirschenmann, K., 2010. "The Dynamics in Requested and Granted Loan Terms when Bank and Borrower Interact Repeatedly," Discussion Paper 2010-63, Tilburg University, Center for Economic Research.
    19. Hans Degryse & Steven Ongena, 2002. "Bank-Firm Relationships and International Banking Markets," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(3), pages 401-417.
    20. Florian Leon, 2015. "What do we know about the role of bank competition in Africa?," CERDI Working papers halshs-01164864, HAL.

    More about this item

    Keywords

    Poverty Reduction; Microfinance Institutions; Entrepreneurial Activity and Small Scale Business;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:khe:scajes:v:5:y:2019:i:2:p:114-119. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ffucdro.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adi Sava (email available below). General contact details of provider: https://edirc.repec.org/data/ffucdro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.