The Influence of Microfinance Institutions as Catalyst for Improved Performance of Small Scale Enterprises in Nigeria

Abstract

The concept of microfinance through the Microfinance Institutions (MFIs) is to assist the Small and Medium Scale enterprises (SMEs) to increase productivity, create jobs and help eradicate poverty. This study was established to examine the impact of microfinance loans on the performance of SMEs. To achieve this objective, both descriptive and quantitative research design methods were adopted for the study. The data gathered were analyzed to provide insight into the impact of credit management practices on organizational performance and profitability. The result shows that MFIs can serve as bedrock for the growth of SMEs, economic development and grass root transformation. It is recommended that government should properly overhaul microfinance programmes in order to achieve the objective of poverty reduction through the disbursement of credit to SMEs. Also, there is need for more strategies and proactive measures to make MFIs and SMEs the agents of economic development in Nigeria. In addition, more awareness should be created for microfinance programmes by the operators to attract SMEs and the poor and downtrodden.

The The Influence of Microfinance Programmes on Women Owned SME Development in Mashonaland West Province of Zimbabwe

“…According to these scholars, microfinance means small credit. Kasali and Fashanu (2021) define Microfinance as an economic development approach that focuses on poverty reduction by providing financial services to low income earners, the poor households and SMEs that are exclude from the formal financial markets. These services include financial services such as credit, savings and insurance.…”

“…In addition, Yogendrarajah and Semasinghe (2014) define microfinance as a development tool that offers non-financial services such modest loans, savings, microleasing, microinsurance, and money transfers to help the extremely poor people with their self-income producing activities. Microfinance predominantly involves administration of funds in generally small amounts to the individuals who are viewed as the less privileged (Kasali & Fashanu, 2021). In most instances these social categories are financially excluded (Al-Doori, 2020).…”

“…The Influence of Microfinance Programmes on Women Owned SME Development in An important technique for raising the living standards of the impoverished is microfinance (Pandey & Ojha, 2020). Microfinance is a concept designed to help Small and Medium Sized Enterprises (SMEs) enhance production, create jobs, and aid in the eradication of poverty (Kasali & Fashanu, 2021). With the intention of fostering their expansion and development, microfinance institutions lend money to the underprivileged, small companies, and cottage industries.…”

“…With the intention of fostering their expansion and development, microfinance institutions lend money to the underprivileged, small companies, and cottage industries. The idea of microfinance is to support Small and Medium-Sized Enterprises (SMEs) in order to boost productivity, create jobs, and aid in the eradication of poverty (Kasali & Fashanu, 2021). In Nigeria, microfinance institutions are privately owned companies that provide financial services to the underprivileged and small and medium-sized businesses, including loans, savings, insurance, and money transfers.…”