Impact of Microfinance Banks on Poverty Reduction in Nigeria (Published)
Impact of Microfinance Banks on poverty reduction in Nigeria focused on the nexus of licensed Microfinance Banks in Nigeria based on sample case study to poverty reductions. Survey designed method was employed to brainstorm with users of Microfinance Banks on the relationships between poverty reduction and micro-loans, micro-savings and transfer payments which are proxies employed by Microfinance Banks for poverty reduction mechanism. Three hypotheses were raised each for the proxies. The chosen sample size is seven hundred respondents with a completed feedback of five hundred and fifty-three. The statistical technique adapted for the decision tests are Pearson Correlation and Regression analysis. The results showed that all the three proxies have a statistically significant effect on reducing poverty in Nigeria, with micro savings having the largest effect. We recommend a strategic policy effort to encourage the multiplication of licensed Microfinance Banks in the Country and spread of the existing licensed Microfinance Banks. It is recommended that further research be carried out on Microfinance Banks’ Capacity Building and inclusiveness for rural areas and physically challenged customers so that their functions of poverty reduction will be widely spread and felt deeply in the Country.
Keywords: Microfinance Banks, Poverty Reduction, impact of micro loans, impact of micro savings, microfinance transfer payment effects
Financial Sector Development and Poverty Reduction Nexus: Evidences from Nigeria (Published)
Previous studies have examined the effect of financial sector development on poverty reduction. This study is unique by adopting the UNDP broader measure of well-being, the Human Development Index (HDI) to provide an argument for financial sector development process and poverty reduction interrelationship in Nigeria for the period 1988-2017. Stationary properties of the series were tested by the ADF unit root test. The paper uses the Johansen Co-integration test to examine the existence of long run relationship among the variables. Generally, it was found that financial sector development has both positive and significant relationship with HDI used as proxy for poverty level. The result also indicates a significant positive relationship between aggregate credit (AGC) and HDI. This shows that financial sector development which manifests in the ability of the banking sector to facilitate borrowing and investment in income earning assets, and stimulate the private sector, in particular, small and medium scale enterprises (SMEs), impacts positively on HDI. Finding also shows that aggregate deposit (AGD) (deposit opportunities available to deposit money banks) is negatively related to HDI and significant. This perhaps suggests that the volume of deposit mobilization by deposit money banks in Nigeria is relatively low to what is needed to transform the economy as well as the standard of living of the people. Realising that Human development is a desideratum and sacrosanct in poverty reduction, the objectives of policies aimed at further strengthening the banking sector should be people focused.
Keywords: Deposit Money Banks, Human Development Index, Nigeria, Poverty Reduction, financial sector development