Barriers of Microfinance Banks’ Credit Delivery to Small Enterprises: An Empirical Analysis from South-Western Nigeria
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Date
2020-12-30
Authors
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Journal ISSN
Volume Title
Publisher
The Romanian Economic Journal
Abstract
This study empirically investigated the barriers of Microfinance banks’ credit delivery to small enterprises
in Nigeria. The areas of study were Lagos and Ogun States. The population of the study was made up of
all the Microfinance banks in Lagos and Ogun States in the South –Western Nigeria. A sample of eight
(8) microfinance banks were chosen; with five (5) from Lagos State and three (3) from Ogun State using
the purposive sampling method. The choice of the sample size was predicated on ability of the researchers to
access financial statements of the selected microfinance banks in the two selected states in the South –
Western, Nigeria. Primary data was used through a structured questionnaire. Total of forty (40)
questionnaires were administered to the respondents, consisting of MFBs staff – branch managers,
operation managers, risk managers, and credit officers who examined and administered credit applications
from small enterprises’ owners on behalf of bank management on a one-on-one basis. Mean ranking and
factor analysis were used to analyze the data. Findings revealed economic recession as major barrier
confronting MFBs in credit delivery to small enterprise owners. The study concluded that despite the roles
of MFBs to provide loans and other financial services to small enterprises operators, the sector was faced
with different barriers thereby limiting their financial performance. The study recommended that Central
Bank of Nigeria (CBN) should adopt a holistic approach on how barriers confronting MFBs would be
drastically reduced, controlled and managed to improve MFBs operations.
Description
Staff Publications
Keywords
Microfinance Banks Barriers,, Micro and Small Enterprises, Economic Recession, NonPerforming loans, Weak Capital Base, Nigeria
Citation
J.A Obadeyi & S.O. Ogbeide & A.A Akande, 2020. "Barriers of Microfinance Banks’ Credit Delivery to Small Enterprises: An Empirical Analysis from South-Western Nigeria," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 23(78), pages 27-46, December,.