IMPACT OF MICROFINANCE INSTITUTION ON ENTREPRENEURIAL DEVELOPMENT IN NIGERIA.
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IMPACT OF MICROFINANCE INSTITUTION ON ENTREPRENEURIAL DEVELOPMENT IN NIGERIA.
Chapter one
1.0 Introduction.
1.1 Background for the Study
The topic of sustainable development in Third World nations such as Nigeria has become a major concern for both the government and the private sector. The government’s massive investment in this platform over the years has delivered no major results.
Poverty is a trait of Nigerian homes and individuals. In recent years, it has become clear that the government’s ability to encourage development alone has limitations.
Most of the conventional functions performed by governments in most countries, such as economic development, are becoming increasingly difficult to achieve.
Nigeria faces unique developmental challenges as a result of maladministration, corruption, infrastructure decay, insecurity of life and property, an unstable macroeconomic framework, and uncertain fiscal policies under successive administrations (Fasua 2008).
Thus, both the public and private sectors of the economy, as well as every segment of society, must be involved in the country’s industrial development process. It is on this basis that the government begins to engage in privatisation policy with the goal of allowing the private sector to participate in the economic development of the country.
nation. As a result, numerous national governments begin to look for ways to incorporate the private sector in the country’s economic growth process.
One of the approaches to development difficulties in poor nations is to stimulate entrepreneurial development programmes. Nigeria had gone a step further by incorporating entrepreneurial studies into the academic curriculum of her school system.
Such policymakers feel that such a decision will instill an entrepreneurial spirit in people, preparing them to create riches through small-scale firms (Fasua 2006).
Small businesses are critical to the development of a country’s economy, particularly in countries like Nigeria. Entrepreneurship resulted in a fact that provides a solid foundation for something. It is the foundation of any nation’s industrialization.
A number of studies have been conducted on the impact of microfinance on entrepreneurial development, as indicated by the fact that various academic journals have dedicated special issues to research establishing this relationship.
Some scholars concentrated on the means by which poverty is reduced. Amin, Rai, and Topa’s (2003) study on the ability of micro finance to reach the poor and easily identified (vulnerable)
They target their essay in such a manner because of worries that microfinance is just helping people marginally below or above the poverty line, but the truly poor and destitute who have no money, no housing, no food, etc. are being systematically excluded.
Copestake, Halokra, and Johnson (2001) compare the influence of microfinance on corporate and individual wellbeing. Cope stake focuses on company performance and household income in order to demonstrate a link between microfinance availability and general well-being among the poor.
Evans and Adams (1999) approach the microfinance challenge from a somewhat different perspective. However, they attempt to explain non-participation in the evolution of microfinance by noting that, while microfinance is employed as a legitimate tool in poverty reduction, more than 75% of poor people choose not to join for a variety of reasons.
Ryne and Holt (1994) conduct a meta-analysis of microfinance with a focus on women’s empowerment, intending to demonstrate that while various studies disagree on the impact of microfinance banks on women’s empowerment, Park (2001) evaluates actual microfinance programmes in China using three(s) key measures (targeting, sustainability, and overall impact).
Thus, both research and practice have observed an increase in concern regarding the impact of microfinance. Despite this emphasis, present research does not give adequate rationale for the relationship between microfinance and entrepreneurial development in poor nations.
Furthermore, the empirical evidence emerging from various studies on the effect of microfinance on entrepreneurial development has so far yielded mixed, inconclusive, and contracting results;
thus, the question of whether microfinance improves or worsens entrepreneurial development remains worthy of further research, such as the one being conducted in this study.
Furthermore, there has been insufficient research into the impact of microfinance on entrepreneurial development in Nigeria. Research also demonstrates that the majority of research on the impact of microfinance on entrepreneurial development have been conducted in industrialised countries.
This indicates that there is a significant deficit in the relevant literature on emerging nations, including Nigeria, that must be addressed through study.
This study seeks to fill this gap by researching the situation in Nigeria and offering further empirical evidence on the effects of microfinance on entrepreneurial development.
1.2 Statement of Problem
Entrepreneurship plays an important role in Nigeria’s development. Entrepreneurship is fundamental to national development, poverty reduction, and job creation. It forms the foundation of any nation’s industrialization.
Because of the importance of microfinance to entrepreneurial development, the Central Bank of Nigeria has designated it as the primary source of financing for entrepreneurship in Nigeria.
Despite this, financing is still seen as one of the most significant barriers to entrepreneurship in Nigeria (Ubom, 2003). While the government and non-governmental organisations (NGOs) have implemented a variety of initiatives and policies to promote entrepreneurship in the country.
Nigeria is one of the world’s poorest countries, with unemployment increasing at an alarming rate. At this point, it is crucial to examine the impact of microfinance on entrepreneurial development in Nigeria.
3. Study Objectives
The overall goal of the research is to assess the influence of microfinance on entrepreneurial development in Nigeria.
Other specific objectives include:-
1. Assess the value of entrepreneurial activity for Nigeria’s long-term development.
2. Assess the challenges of access to funding for entrepreneurship development in Nigeria.
3. Evaluate the links that exist between small businesses and microfinance banks.
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