Empirical Review of the Role of Microfinance Bank’s Operations on Poverty Alleviation in Nigeria

Abstract

The scourge of poverty and the rate at which the figure is growing has necessitated the establishment of many anti-poverty programmes by different administrations in Nigeria. As at 2010 the number of Nigerians living below poverty line stood at 72 million, this then means that nearly half of Nigeria Population of 160 million is living below poverty line with all the anti-poverty programmes put in place. This figure is still on the increase. Microfinance Banking is the most recent and the only anti-poverty programme that combines financial intermediation with provision of financial services to the poor in the society. This paper therefore examined the role of Microfinance Bank’s operations on poverty alleviation in Nigeria. Data for the study were generated via secondary sources. The study built a regression model in line with the hypotheses. SPSS package version 17.0 was used. We tested for and corrected Autocorrelation and Muiticoliinearity. Our findings were as follows: the operations of MFBs have played significant role in poverty reduction in Nigeria, loans and advances of MFBs have significant negative impact on poverty alleviation. Some of our of our findings were in agreement with the objectives of MFB, while those that were not in agreement reflect the peculiar circumstances of the operations of microfinance  banking  in  Nigeria.  Since the government of Nigeria is interested in alleviating poverty, this work will be of immense help. The government can support Microfinance development by promoting macroeconomic stability, and avoiding interest rate caps and high inflation, ensure that the benefits of Microfinance banking are targeted at the core poor.