ABSTRACT
This research is focused on impact of microfinance bank on unemployment in Nigeria. Microfinance provides people with capital to start and/or expand their businesses, as small businesses with microfinance support have grown into medium enterprises creating employment opportunities for others. Survey research design was used to carry out the study. This study reveals that there is a casual relationship between lending and loan recovery in microfinance banks and there is a significant positive correlation between lending and loan recovery in Nigerian microfinance banks. It recommends that banks should device appropriate strategies to ensure adequate lending and loan recovery management, since not doing so could spell doom for the banks in terms of profitability.
TABLE OF CONTENTS
Title page i
Approval ii
Certification iii
Dedication iv
Acknowledge v
Abstract vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 5
1.4 Research Questions 5
1.5 Statement of Hypothesis 6
1.6 Significant of the Problems 6
1.7 Scope of the Study 7
1.8 Limitations of the Study 7
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual framework 9
2.1.1 Concept of Micro-Finance 9
2.1.2 Microfinance in Nigeria 11
2.1.3 Loan performance 13
2.1.4 Causes of loan repayment default 15
2.1.5 Five Cs of Credit Management 17
2.2.0 Theoretical Literature 19
2.3 Financial Constraint Theory and Model Generation 23
2.4 Financial growth theory 26
2.5 Empirical Literature 27
2.6 Summary of the Literature Review 30
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 32
3.2 Research Design 32
3.3 Sources of Data Collection 33
3.3.1 Primary Source of Data 33
3.4.2 Secondary Source of Data 34
3.4 Tools for Data Collection 34
3.5 Population of the Study 35
3.6 Sample and Sampling Techniques 36
3.7 Instrument for Data Collection 37
3.8 Reliability and Validity of Data and Test Instruments 38
3.9 Data Analysis Techniques 39
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS OF RESULTS
4.0 Introduction 40
4.1 Presentation of data 40
4.2 Analysis of Data 40
4.3 Discussion of Results 65
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction 66
5.2 Summary of Findings 66
5.3 Conclusion 66
5.4 Recommendations 67
5.5 Area for Further Research 67
REFERENCES 68
APPENDIX 71
LIST OF TABLES
Table 4.1 sex 41
Table 4.2 Martial Status of the Respondents 42
Table 4.3 Age bracket of the respondents 42
Table 4.4 Experience 43
Table 4.5 qualifications 44
Table 4.6 position in the organization 45
Table 4.7 Lending and loan recovery have great significant impact
on the Nigeria Microfinance bank 46
Table 4.8 Lending and loan recovery affect the performance of the
Nigeria Microfinance bank. 47
Table 4.9 Increase in the lending and loan recovery increases the
performance of the Nigeria microfinance bank 48
Table 4.10 Lending has no correlation with loan recovery
in microfinance bank 49
Table 4.11 Promoting lending and loan recovery promotes the performance
of the Nigeria Microfinance bank. 50
Table 4.12 Inadequate business plan causes default in loan repayment in
Nigeria Microfinance bank. 51
Table 4.13 Lack of service of internal financial auditor causes default in loan repayment in Nigeria Microfinance bank. 53
Table 4.14 Lack of service of internal financial auditor causes default in loan repayment in Nigeria Microfinance bank. 54
Table 4.15 Business failure causes default in loan repayment in Nigeria bank 55
Table 4.16 Increase in lending increases the chances of loan recovery in
Nigeria Microfinance bank. 56
Table 4.17 Changes in lending ability of the Nigeria Microfinance
bank causes the loan recovery to change in the positive direction 57
Table 4.18 Microfinance bank lending has causality relationship with
the loan recovery 58
Table 4.19 Loan recovery of the Nigeria Microfinance bank causes
lending ability to increase 59
Table 4.20 The rate of credit advances of the Nigeria Microfinance
bank is high. 60
Table 4.21 The rate of credit advances of the Nigeria Microfinance
bank is not encouraging 61
Table : 4.22 Loan advances of the Nigeria microfinance bank is relatively Low 62
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The word microfinance is being used very often in development vocabulary today. Although the word is literally comprised of two words: micro and finance which literally mean small credit; the concept of microfinance goes beyond the provision of small credit to the poor. Christen (1997) defines microfinance as ‘the means of providing a variety of financial services to the poor based on market-driven and commercial approaches. However microfinance practices today still focus on micro-credit: providing the poor with small credit with the hope of improving their labour productivity and thereby lead to increment in household incomes.
Microfinance bank as noted by (UNDP 2003) is a set of innovative and alternative financial service to the poor who do not have access to formal institution, it is a banking institution established to provide financial aid in the areas of micro credit, micro insurance to individuals, group and institutions, non-governmental organization for the purpose of development.
According to CBN (2005), “microfinance is about providing financial services to the poor who are traditionally not served by the conventional financial institutions’. Microfinance bank is featured by three distinguishing factors these are:
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