Constraints to Women Entrepreneurs’ Access to Microfinance in South-South Nigeria

Abstract

The aim of the study is to examine the constraint factors that inhibit women entrepreneurs’ access to microfinance in South-South region of Nigeria. Using exploratory factor analysis procedure (the principal factor model), four constraint factors were extracted-Technical, economic, managerial and social factors. Technical factor include: transportation cost, lack of trust, diversion of funds, short payback period, loan targeted at certain businesses; economic factor include:  protocol before acquiring loan, high interest rate on borrowing, limited amount of loan given, provision of collateral, non-willingness of MFIs to grant loan to women entrepreneur; managerial constraint factor include: low accessibility to loan, the time lag between application and loan collection, the amount given as loan is discretionary, opening of account as condition for microcredit access, the educational level of the entrepreneur; social factors include:  distance, securing of guarantor, only people in business are being given loan, and finally, too many applications than MFIs can afford. Also, the study suggested reduction of interest rate; microfinance institutions being brought closer to the people most especially the rural entrepreneurs; relaxing the condition inherent in loan access from microfinance banks; sensitization of more women about microfinance services; giving priority to women as well as increasing the payback period of loan as ways to improve access to microfinance services by women entrepreneurs.

Key words: South-South Nigeria, Constraints, Microfinance, Women Entrepreneurs