Effects of Time Deposit and Bank Loans on the Financial Performance of Microfinance Banks in Nigeria

Abstract

The purpose of the study was effect of time deposit and bank loans on the financial performance of microfinance banks in Nigeria. The specific objectives were to: investigate the effect of time deposits on the financial performance (ROA) of microfinance banks in Nigeria; ascertain the effect of microfinance bank loans on the financial performance (ROA) of microfinance banks in Nigeria; assess the effect of real interest rate on the financial performance (ROA) of microfinance banks in Nigeria; and examine the effect of gross capital formation on the financial performance (ROA) of microfinance banks in Nigeria. This study utilized the exploratory research design to empirically analyze the effects of deposit mobilization on the financial performance of microfinance banks in Nigeria. Secondary data, time-series and cross-sectional data were used in the study. Data for the study were gathered from annual reports of various microfinance banks in the selected states in Nigeria, as well as institutional sources like the CBN statistical bulletins, and the NDIC reports and records. Panel data analysis was employed in the study. From the result of these analyses, the findings are summarized as follows:

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