Access to Microfinance Banks’ Facilities and Poverty Reduction in Kano State, Nigeria

Abstract

Micro-financing is one way of fighting poverty especially in developing countries, where most citizens are poor. The main objective of microfinance banks (MFBs) is provision of timely, diversified, affordable and dependable financial services to the economically active poor. However, despite this laudable objective of MFBs, a large percentage of the Nigeria’s population is excluded from financial services. Furthermore, there are still inadequate funds for intermediation owing to lack of aggressive savings mobilization. The combination of these factors significantly weakened the microfinance sub-sector and its ability to achieve its objective. This study is carried out to assess the contribution of microfinance banks to poverty reduction in Kano State, Nigeria. The main objective of the study is to examine the relationship between micro-finance banks’ facilities and poverty reduction in Kano State, Nigeria. This study uses primary data that is generated through a structured questionnaire. Data for this study were analysed using logistic regression. This study found that there is a significant relationship between access to MFBs facility and poverty reduction in Kano State. Therefore, this study strongly recommends that there is the need to create more funds flow to the MFBs in order to be able to extend microcredit to larger poor households to mitigate the menace of poverty in Kano State, Nigeria.

Keywords: Microfinance, poverty, poverty reduction, financial services, savings mobilization