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Microfinancing for Poverty Reduction and Economic Development; a Case for Nigeria

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  • Awojobi, Omotola
  • Bein, Murad

Abstract

The main focus of this research is to juxtapose the features of microfinancing and the institutional forbearance of economic development in Nigeria. Based on empirical study, it has been observed that poverty is multifaceted and its persistence is due to lack of productive resources. The Nigerian case reveals that the major constraint to improving the standard of living of the poor is capital (finance). This has restricted their extensive participation in economic activities which could improve their lives. For this study, our theoretical a priori expectation is that provision of microfinance services such as savings and microloans have direct impact on GDP. A causal relationship will be established and evaluated with the ‘t-test’ statistic, while the relevance of the independent variables in explaining the subject will be justified based on the F-statistic test and R2 coefficient of multi-determination. Also, using a lin-log regression model, economic growth shall be regressed on poverty level in Nigeria. This will create an assertion whether Nigeria needs a systematic reinforcement of the microfinance mechanism to propagate a soothing trend for poverty reduction and economic growth.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:33530
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    File URL: https://mpra.ub.uni-muenchen.de/33530/1/MPRA_paper_33530.pdf
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    References listed on IDEAS

    as
    1. Zeller, Manfred & Meyer, Richard L., 2002. "The triangle of microfinance," Food policy statements 40, International Food Policy Research Institute (IFPRI).
    2. Paul A. Samuelson & Franco Modigliani, 1966. "The Pasinetti Paradox in Neoclassical and More General Models," Review of Economic Studies, Oxford University Press, vol. 33(4), pages 269-301.
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    Cited by:

    1. repec:jfr:ijfr11:v:8:y:2017:i:3:p:162-171 is not listed on IDEAS
    2. Sunia Ayuub, 2013. "Impact of Microfinance on Poverty Alleviation. A Case Study of NRSP in Bahawalpur of Pakistan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(1), pages 119-135, January.
    3. Wahibur Rokhman, 2013. "The Effect Of Islamic Microfinance On Poverty Alleviation: Study In Indonesia," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 11(2), pages 21-30.

    More about this item

    Keywords

    Microfinance; Poverty; Economic Development; Economic Growth; Financial Services; Gross Domestic Product;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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