The Impact of Microfinance Institutions on Poverty Reduction in Nigeria

Abstract

This research work focuses on the Impact of Microfinance Institutions (MFIs) in reducing poverty in Nigeria. It examines whether the credit and financial facilities provided by the MFIs especially the Microfinance Banks (MFBs) and Cooperative Investment and Credit Soceities (CICSs) to the informal sector and Micro Small and Medium Enterprises (MSMEs) are optimally used to reduce poverty and enhance economic development. The study adopts the survey and descriptive research designs. Five MFBs and three (CICSs) in the rural, semi-ban and urban centres constitute the population while forty (40) customers of MIFBs, twenty (20) members of CICSs and eighteen (18) officials of both institutions are the sample size. Primary and secondary data were collected through questionnaires, personal interview and related publications through desk research respectively. It was found  out that credit and financial services provided by the MFBs and CICSs enable the poor and low income group and MSMEs to engage in economic activities that make them self reliance, enhances  their income and help them create wealth and thereby reduce poverty. For the MFIs to overcome their various challenges and discharge their roles effectively.  It is recommended that they should be strengthened in terms of adequate capitalization, vigorous and regular training of customers and staff, effective regulation, monitoring and supervision by CBN and incorporation of good corporate governance.

Keywords: Microfinance, Poverty