ABSTRACTThe thrust of this study is to evaluate the impact of Microfinance banks credit on Kaduna Stateand to examine the impact of Microfinance on the beneficiaries. The data utilized cross sectionaldata obtained through questionnaires administered randomly to six (6) operators, one hundredand eighty (180) questionnaires beneficiaries of microfinance banks’ credit facilities and onehundred and eighty (180) questionnaires non- beneficiaries of microfinance bank credit facilitiesrespectively. The tools of analysis used are Descriptive Statistics, Paired sample t test techniqueand Double Difference (DD) estimator model. The study reveals that (i) there is a significantdifference (in terms of income, business expansion and improved profit) in the number ofbusinesses who use microfinance products than those that did not use Microfinance Credit. Thisstudy concludes that there is a significant relationship between Microfinance Credit and changein income, output growth and general welfare level in Kaduna State. Therefore, the studyrecommends that the state government in partnership with the Central Bank of Nigeria shouldensure that Microfinance product should be combined with other development tools to leveragethe effect of Credit. Second, repayment should include a grace period with reasonable scheduleinstead of weekly payment period that is presently practiced among the microfinance banks inthe State.
TABLE OF CONTENT
TITLE PAGE…………………………………………………………………………………..…iDECLARATION………………………………………………………………………………...ii
CERTIFICATION……………………………………………………………………………….iii
ACKNOWLEDGEMENTS……………………………………………………………………... 4
TABLE OF CONTENTS………………………………………………………………………... v
LIST OF TABLES……………………………………………………………………………... 10
LIST OF FIGURES……………………………………………………………………………… ABSTRACT………………………………………………………………………………………
CHAPTER ONE: INTRODUCTION……………………………………….……………..1
1.1 Background of Study……………………………………………………1
1.2 Statement of the Problem………………………………………………3
1.3 Research Questions ……………………………………………………..5
1.4 Objectives of the Study…………………………………………………5
1.5 Hypotheses……………………………………………………………..5
1.6 Significance of the Study……………………………………………….6
1.7 Scope and limitation of the study……………………………………..6
1.8 Organization of Study………………………………………………….6
CHAPTER TWO: LITERATURE REVIEW……………………..………………………7
2.1 Conceptual Framework………………………………………………..7
2.2 Theoretical Framework………………………………………………..11
2.3 Empirical Literature……………………………………………………18
2.3.1 An overview of various Economic Development Programmes……….30
2.3.2 Microfinance Role in Economic Development………………………..34
2.3.2 Microfinance Policy and Development Framework………………….35
2.3.3 An Overview of the Structure of Microfinance Banks ………………36
2.3.4 Transmission Mechanism……………………………………………..37
CHAPTER THREE: METHODOLOGY……………………………………………………39
3.1 Study Area…………………………………………………………….39
3.2 Source of data…………………………………………………………39
3.3 Data Collection Techniques and Tools………………………………….39
3.4 Analytical Framework ……………………………………………….40
3.4.1 Descriptive Statistic.………………………………………………….41
3.4.2 Compare Means ………………………………………………………41
3.4.3 Paired Sample t Test…………………………………………………..41
3.4.4 Double Difference (DD) Estimator Model …………………………..42
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS OF RESULT………….45
4.1 Data Presentation ……………………………………………………..45
4.2 Impact of Microfinance Facilities on the Business of Beneficiaries….55
4.3 Identified Problem and Prospect of Microfinance Operators and Client.62
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS……63
5.1 Summary…………………………………………………………………63
5.2 Conclusion ………………………………………………………………63
5.3 Recommendations ………………………………………………………64
REFERENCE …………………………………………………………………………………66
APPENDICES A: Questionnaire non user of MFBs facilities (control group)…….……..72
B: Questionnaire for user of MFBs facilities (experimental group)……….75
C: Questionnaire for operators of MFBs……………………………………78
D: Paired Samples Statistics for beneficiaries………………………………81
E: Paired Sample Test for beneficiaries…………………………………….81
F: Paired Sample Test for beneficiaries (experimental group) and non-beneficiaries (control group)……………………………………........82
G: One Sample t Test of Control group ……………………………… …….82
H: Income series for beneficiaries (experimental group) non-beneficiaries (control group) of MFB……………………………83 I: Abbreviations ………………………………………………………….84
LIST OF TABLES
Table 2.3.1.1 Various Economic Development Programmes ……………………….30
Table 4.1.1(a): Profile of User (customer) …………………………………………..46
Table 4.1.1(b): Table of User of Microfinance Facilities ………….……………..….47
Table 4.1.2: Profile of Non users of microfinance credit facilities……………..........48
Table 4.2.1: Legal and Ownership Structure of Selected MFBs, it’s Targeted Business and their Source of Funds……………………………...........50
Table 4.2. 2: Maximum Loan Tenor, General Rate of Interest, Minimum Loan Given and its Credit Methodology …………………………………….52
Table 4.2.3 Range of Product Offered by Microfinance Banks ……………..………53
Table 4.2.4: Target Beneficiaries of Microfinance Bank……………….……………54
Table 4.2.5: Rate of Interest……………………………………..……………..…….55
Table 4.3.1: Selected MFBs and Business Activities of Beneficiaries……………....56
Table 4.3.2: Frequency Table of Annual Income of Beneficiaries before and after Accessing Loan from selected MFBs………………………………….58Table 4.4.1: Challenges and Problems of Microfinance Operators ………………….61Table 4.4.2: Challenges Faced by User/Customer of Microfinance Banks…………..63