Microfinance and Poverty Reduction in Nigeria

A Study of Selected Microfinance Institutions in Benin Metropolis South-South of Nigeria.

Master's Thesis , 2013 , 87 Pages

Sociology - Miscellaneous

[...] The poverty question is a global phenomenon. It is perhaps one of the greatest challenges facing
Mankind today, especially in most parts of the developing world. This Perhaps explains why the
eradication of poverty was listed as the first of the eight issues of the millennium development
goals. The problem of poverty is more disturbing giving the fact that there is abundant and
enormous wealth in the world to adequately meet the needs of every one. Poverty may be
defined as a condition of lack and inability to meet adequately the basic needs of life such as
Shelter, food, education and health care. Similarly, according to a United Nations statement:
Poverty is a denial of choices and opportunities, a violation of human
dignity. It means lack of basic capacity to participate effectively in
society.
It means not having enough to feed and clothe a family, not having a
school or clinic to go to; not having the land on which to grow one’s food
or a job to earn one’s living, not having access to credit. It means
insecurity, powerlessness and exclusion of individuals, households and
communities. It means susceptibility to violence, and it often implies living
on marginal or fragile environments, without access to clean water or
sanitation.(UN,2008 quoted in Ucha,2010).
2
In other words, the problems of poverty is more worrisome in Sub-Saharan Africa with 47.5% of
the people living on less than $1.25 and 70% living on less than $2 per day in Sub-Sahara Africa
(World Bank, 2008).The figure may have become worse considering the drought that hit parts of
horn of (East) Africa in 2011 and the problem of maladministration or poor governance
bedeviling the region. In Nigeria the high level of corruption, poor leadership has contributed to
exacerbate the problem of poverty. Ucha, 2010 puts it thus: “Unemployment, corruption, non
diversification of the economy, income inequality, laziness and a poor educational system can be
considered to be some of the key factors contributing to poverty in Nigeria”(p.46).
Given the fact that Nigeria is a country with rich human and natural resources, it is disturbing
that majority of her citizens are still very poor. The government has over the years formulated a
lot of programs and policies geared towards poverty reduction; however it remains a controversy
whether those programs and policies have actually achieved their desired objectives.[...]

Inhaltsverzeichnis (Table of Contents)

• Chapter one: Introduction
  • 1.1: Background to the Study
  • 1.2: Statement of the Problem
  • 1.3: Objectives of the Study
  • 1.4: Research Question
  • 1.5: Significance of the Study
  • 1.6: Definition of Key Concepts
• Chapter 2: Literature Review and Theoretical Framework
  • 2.1: Definition and Meaning of Poverty
  • 2.2: Measurement of Poverty
  • 2.3: Incidence of Poverty in Nigeria
  • 2.4: Poverty Reduction Strategies in Nigeria
  • 2.5: Microfinance/Credit Schemes
  • 2.6: General Overview of Microfinance/Microcredit Scheme
  • 2.7: Meaning and Definition of Microfinance
  • 2.8: Growth of Microfinance in Nigeria
  • 2.9: Justification for the Establishment of Microfinance Banks in Nigeria
  • 2.10: Empirical Literatures on Microfinance
  • 2.11: Theoretical Framework
• Chapter 3: Research Methodology
  • 3.1: Research Design
  • 3.2: The Area of Study
  • 3.3: Population of Study
  • 3.4: Sample
  • 3.5: Sample Size
  • 3.6: Methods of Data Collection
  • 3.7: Data Analysis
• Chapter 4: Data Analysis and Interpretation
  • 4.1: Question one: Socio-Economic and Demographic Characteristics of Microfinance Scheme Beneficiaries
  • 4.2: Question two: The Impact of Microfinance on the Living Standard and Wellbeing of Beneficiaries
  • 4.3: Question three: The Policies, Regulatory and Supervisory Frameworks That Guide Microfinance Banks in Nigeria
  • 4.4: Question Four: Problems/Challenges Hampering the Successful Implementation of the Microfinance Scheme
  • 4.5: Discussion of Results
• Chapter 5: Recommendation and Conclusion
  • 5.1: Recommendations
  • 5.2: Conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This master's thesis examines the impact of microfinance on poverty reduction in Nigeria, using selected microfinance banks in Benin Metropolis as a case study. The study seeks to understand the socio-economic and demographic characteristics of microfinance scheme beneficiaries, the impact of microfinance on their living standards and well-being, the policies and regulatory frameworks guiding microfinance banks in Nigeria, and the challenges hampering the successful implementation of the microfinance scheme. The key themes explored in the thesis include:

• The multifaceted nature of poverty in Nigeria and its impact on individual lives and communities.
• The potential of microfinance as a tool for poverty reduction, focusing on its ability to empower individuals and promote economic development.
• The importance of a supportive policy and regulatory environment for the effective functioning of microfinance institutions in Nigeria.
• The challenges faced by microfinance institutions in reaching the poorest segments of the population and mitigating the effects of poverty.

Zusammenfassung der Kapitel (Chapter Summaries)

Chapter One: Introduction

This chapter introduces the study, providing a background on poverty in Nigeria and the role of microfinance in poverty reduction efforts. It outlines the research problem, objectives, research questions, significance of the study, and defines key concepts.

Chapter Two: Literature Review and Theoretical Framework

This chapter delves into the existing literature on poverty and microfinance. It examines different approaches to defining and measuring poverty, including the monetary approach, capability approach, social exclusion approach, and participatory approach. It explores the incidence of poverty in Nigeria, reviewing past poverty reduction strategies implemented by the government. The chapter also provides an overview of microfinance, discussing its history, growth, and justification for its establishment in Nigeria. Finally, it presents the theoretical framework of the study, which is based on Amartya Sen's capability approach.

Chapter Three: Research Methodology

This chapter describes the research design, the study area, the target population, and the sampling methods employed. It explains the methods of data collection, including questionnaires, structured interviews, focus group discussions, and participant observation. Finally, it details the methods of data analysis, which include descriptive statistics, simple percentages, tabulations, and charts using SPSS.

Chapter Four: Data Analysis and Interpretation

This chapter presents and analyzes the data collected during the fieldwork. It explores the socio-economic and demographic characteristics of microfinance scheme beneficiaries, examines the impact of microfinance on their living standards and well-being, analyzes the policies and regulatory frameworks guiding microfinance banks in Nigeria, and discusses the challenges encountered in implementing the microfinance scheme.

Chapter Five: Recommendations and Conclusion

This chapter concludes the study, summarizing the key findings and presenting recommendations for improving the effectiveness of microfinance as a tool for poverty reduction in Nigeria. The recommendations focus on addressing challenges such as high interest rates, limited outreach, inadequate funding, and the need for a more supportive policy environment. The chapter emphasizes the multidimensional nature of poverty and the need for a comprehensive approach involving government, microfinance institutions, and other stakeholders.

Schlüsselwörter (Keywords)

This study focuses on poverty, microfinance, microfinance institutions, and the Benin Metropolis in Nigeria. The research examines the impact of microfinance on poverty reduction and explores the challenges faced by microfinance institutions in achieving their goals. The study uses the capability approach as a theoretical framework to understand poverty in a holistic manner, considering not just income and consumption but also factors that affect individuals' capabilities and functioning.

• College: University of Freiburg (Global Studies Program, Institute fur Soziologie.)
• Author: Uyi Benjamin Edegbe (Author)
• Publication Year: 2013
• Pages: 87
• Catalog Number: V215819
• ISBN (eBook): 9783656444244
• ISBN (Book): 9783656444435
• Language: English
• Tags: microfinance, poverty, reduction, nigeria, study, selected, institutions, benin, metropolis, south-south