Impact of Microfinance Banks on Income Earning Activities of Rural Dwellers in South Western Nigeria

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Impact of Microfinance Banks on Income Earning Activities of Rural Dwellers in South Western Nigeria

Journal Title: International Journal of Financial Markets - Year 2014, Vol 1, Issue 4

Abstract

Due to the in ability of the conventional commercial banks to fulfil their financial obligation towards the rural dwellers in terms of their micro businesses. These loopholes have led to the establishment of micro finance scheme (formally community banking scheme) to integrate the existing non-bank financial institutions like, revolving loan scheme, cooperative societies and other financial media in the rural areas into the main stream of the national financial system. The paper is out to examine the impact of micro finance banks on the income earning activities of rural dwellers in Nigeria using primary data collected through questionnaires from two states purposively sampled from the six states of the south west geo-political zone of the country (Nigeria). For the analysis of the data, descriptive statistical methods (the simple percentages) were used and the chi-square method was used to test the formulated hypotheses. The findings indicate that the availability and activities of micro finance banks have improved savings mobilization of the rural dwellers and in fact, the banks in question have really impacted positively on the income earnings of the rural dwellers. It is therefore recommended that microfinance banks should always monitor their clients‟ projects right from the beginning to the end as an improvement on their past performances. Also, professional advice should always be given where needed to their customers since majority of the rural dwellers patronize the micro finance banks more than they do to the conventional commercial banks.

Authors and Affiliations

Ayodele Thomas D.

Keywords

Micro finance - the provision of financial services to low-income and poor self-employed people. Financial intermediation- the process through which the surplus unit of the economy come in contact and interact with the deficit unit of the economy. Rural dwellers- people who inhabit the rural areas of the economy. Banks- financial institutions saddled with the task of accept deposits and giving of loans/ advances and financial advice to their customers

EP ID EP28709
DOI -
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