Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Economic Growth and Microfinance Banks’ Performance in Nigeria Over the Period 1992 To 2021

Israel Odion Ebiosetale IDEWELE PhD, Okwor, Emmanuel PhD, Dibua, Ekene, C, PhD, Ikilidih, Joy N PhD, Ejinkonye, Remigius Chinwoke PhD, Ama Ibiam Obasi PhD

Abstract

The study empirically examined the relationship between microfinance bank and economic growth in Nigeria over the period 1992 to 2021. The study employed the ordinary least square econometric technique for the analysis of data. The results from the analysis indicate that microfinance bank return on assets (MFROA) (a proxy for performance) and microfinance bank deposits (MFD) have significant positive relationship with economic growth in Nigeria. Meanwhile, while those of microfinance loans (MFL) have significant negative impact on growth, those of microfinance bank investment (MBI) does not have significant impact on economic growth in Nigeria within the investigating period. The study recommends among others that, Government should find ways of encouraging other financial institutions to support microfinance banks and institutions with more funds that will enable them provide better financial services by way of microcredits to small businesses in the country. Also, management of microfinance banks should ensure that appropriate productive investment that will enhance their overall profitability, should be embark on.

Keywords

Microfinance bankMicrofinance LoanPerformanceEconomic GrowthFinancial

References

Abdullah, R., & Ismail, A. G. (2014). Al-Tawhid in relation to the economic order of microfinance institutions. Humanomics, 30, 325-348.doi: 10.11 08/H-0 1-2014- 0006 Abiola, B. (2011). Impact analysis of microfinance in Nigeria. International Journal of Economics and Finance, 3(4), 217-225. doi: 1 0.5539/ijef.v3n4p2 17 Acha, l.A. (2012). Microfinance banking in Nigeria: Problems and prospects. International Journal of Finance and Accounting 2012, 1(5): 106-111. doi: 10.5923/j.ijfa.20120105.04 Ademola E. A and Arogundade, K. (2014). The Impact of Microfinance on Economic Growth in Nigeria, Journal of Emerging Trends in Economics and Management Sciences, 5(5), 397-405. Ademu, W. A. (2012). Finance for the poor: An assessment of the performance of microfinance institutions in Nigeria, An International Multidisciplinary Journal, 6(2), 3 12-325. doi: Agba, A. M. 0; Ocheni, S. & Nkpoyen, F. (2014). Microfinance credit scheme and poverty reduction among low-income workers in Nigeria, Journal of Good Governance and Sustainable Development in Africa, 2(1), 1-13. Aghion, D., Armendáriz, B & Morduch, J. (2010). The Economics of Microfinance, The MIT Press, Cambridge, Massachusetts Ajagba, T.S. & Bolaji, B.0. (2013). Socio- economic impact of microfinance bank on the standard of living of commercial motor cycle riders in Ilorin west LGA of Kwara state, Nigeria. Journal of Business Management 1(4): 69-82. Akpan, E.S. and Nnejl, I.D. (2015). Contribution of microfinance banks to the development of small and medium scale enterprises in Nigeria. Research Journal of Finance and Accounting, 6(8), 19-28. Anku-Tsede, 0. (2014). Microfinance intermediation; regulation of financial NGO in Ghana. International Journal of Law and Management, 56, 274-301. doi: 10.11 08/IJLMA-07- 20 12-0025 Apere, T. 0. (2016). The impact of microfinance banks on economic growth in Nigeria. International Journal of Academic Research in Economics and Management Sciences 2016, 5(4), 53-61. DOl: 10.6007/IJAREMS/v5-i4/2290 Arabi, S.H and Meisami, H. (2013). The concept and fundamentals of Islamic microfinance and prospects for its introduction in Iran. Journal of Islamic Finance and Business Research, (2) 1, 1-12 Artadi E., and Sala-i-Martin, X. (2003). The economic tragedy of the XXth Century: Growth in Africa. NBER Working Papers 9865. Central Bank of Nigeria (2011). Microfinance Framework for Nigeria. Central Bank of Nigeria (2013): Guidelines for microfinance banks in Nigeria. Retrieved from www.cenbank.org Chew, B. C., Tan, L. H., & Hamid, S. R. (2016). Ethical banking in practice: a closer look at the co-operative bank UK plc. Qualitative Research in Financial Markets, 8, 70-91 .doi: 10.11 08/QRFM-02-20 15-0008 Chowdhury, Omar Heider (1991) ‘Human Development Index: A Critique.’ The Bangladesh Development Studies, 19(3). pp. 125-7. Edefl.aje, A.L. (2011). Impact assessment of the role of microfinance banks in financing small scale enterprises in Delta state, Nigeria. International Journal of Economic Development Research and Investment, 2(3): 109-113. Eliigiamusoe, G. (2011). Issues in microfinance: Enhancing financial inclusion. Benin City, Nigeria, Mmdcx Publishing Co. Ltd. El-Namrouty, K.A. & Al-thalathini, D.A. (2013). Effect of micro-grants on poverty alleviation of Palestinian families (Gaza strip-Palestinian territories). Journal of World Hashim, Y. A & Dodo, P.G. (2015). Access to microfinance banks’ facilities and poverty reduction in Kano State, Nigeria, European Journal of Business and Management, 7(35), 59-65, www.iiste.org Hassan, A. (2014). The challenge in poverty alleviation: role of Islamic microfinance and social capital. Humanomics, 3 0,76-90.doi: 10.11 08/H- 10-201 3-O0ó8lnternational Economic Development Council (2016): www.iedconline.org Hicks, Douglas A. (1997) ‘The Inequality-Adjusted Human Development Index.’ World Development, 25(8). pp. 1283-1298. Ifionu, E. P and Olieh, G. (2016). A decade of microfinance banks’ operations and economic development in Nigeria, Research Journal of Finance and Accounting, 7(5), 152- 161. Retrieved from www.iiste.org Ikpefan, 0. A., Taiwo, J. N., and Isibor, A. (2016). Microfinance (MO and Poverty Alleviation in Southwest Nigeria: Empirical Evidence. Journal of South African Business Research, 1—19. https://doi.org/DOI: 10.5171/2016.137638 Jacobs, G., & Slaus, I. (2010). Indicators of Welfare Progress: The power of Measurement and Human Welfare. CADMUS, A papers series of the South European division of the World Academy of art and science (SEED-WAAS), 53-113. Khalaf, L.S. (2019). The Effect of Microfinanée Institutions Activities on Economic Growth in Arab Countries. Academy of Accounting and Financial Studies Journal, 23(1), 1-8. Olowe, F.T; Moradeyo, O.A and Babalola ,O. A. (2013). Empirical study of the impact of microfinance bank on small and medium growth in Nigeria. International Journal of Academic Research in Economics and Management Sciences, 2(6),l 16-124. DOl: 1 0.6007/IJAREMS/v2-i6/465 Rauf & Mabmood, (2016), Islamic Microfinance and Household Welfare Nexus: Empirical Investigation from Pakistan, Asia-Pacific journal of rural Development 1(3): 1-20. Robinson, M. S., The Microfinance Revolution The World Bank, Washington, D.C., The assumption that propensity to save is low in most rural areas and that rural savings mobilization is difficult, (1986). World Bank, (2014): www.worldbank.org

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT

Cashflow Management and the Performance of Commercial Banks in Nigeria

Author: Jeffrey Ayas Iyakonbogha, Clement E. Ozele

The Nigerian Code of Corporate Governance and Financial Performance of Deposit Money Banks in Nigeria

Author: i, Eneaniofu Daniel Mmaduakonam, ii, Azolike Nkiru Nkechi, iii, Emeter Patrick Okechukwu, iv, Okwor Emmanuel Ejimnkonye