Do Micro Finance Banks Influence The Performance Of Small Scale Business Entrepreneurs In Ijebu North Lga, Ogun State, Nigeria?
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Sep 30, 2024
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Abstract
This paper contributes to the debate on the impact of Microfinance financial and non-financial services on the development of small-scale entrepreneurs. This study actually investigated the influence of Access to Microfinance Credit and Microfinance services on the development of small-scale entrepreneurs in Ijebu North Local Government Area of Ogun State, Nigeria. Survey research design using simple random sampling technique was employed to select 90 out of 175 registered small-scale entrepreneurs in Ijebu North LGA. Applying regression analysis on the primary data collected showed that a positive and significant relationship exists between Access to Microfinance credit and performance of small-scale entrepreneurs in the sampled areas. In addition, Microfinance service was also found to exert a significant influence on small-scale entrepreneurs’ performance, albeit, the correlation coefficient and the coefficient of determination were below average. This notwithstanding, the study concludes that Microfinance provision of credit; financial services, business support, and empowerment have positively influenced business performance, income generation, asset accumulation, and overall well-being of small-scale entrepreneurs in the sample area. It is recommended that microfinance institutions should continue to focus on expanding access to credit and other financial and advisory services to small-scale entrepreneurs to continuously improve their overall performance.
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Keywords
MicrofinanceSmall Scale BusinessEntrepreneursPerformance
References
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• Ashamu. S (2014). The impact of micro-finance on small-scale business in Nigeria. Journal of Policy and Development Studies, 9(1): 179-193.
• Augustine, P. & Asiedu, E. K. (2017). The role of small and medium enterprises in job creation and economic growth in Ghana. Journal of Social and Development Sciences, 8(1), 1-12.
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• Bika, Z., Subalova, M., & Locke, C. (2022). Microfinance and small business development in a transitional economy: Insights from borrowers’ relations with microfinance organizations in Kazakhstan. Journal of Development Studies, 58(1), 183-203.
• Chikwira, C., Vengasai, E & Mandude, P (2022). The impact of microfinance institutions on poverty alleviation. Journal of Risk and Financial Management, 15(9): 393.
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• Mrindoko, A. and Pastory, D. 2022. The Contribution of Microfinance Institutions (MFIs) Services to Poverty Reduction among Micro and Small Entrepreneurs in Iringa Municipality, Tanzania. African Journal of Applied Research. 8, 1 (Apr. 2022).
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• Ogunmuyiwa, M.S & Amida O.A (2022). The nexus between electronic payment system and entrepreneurial activities in rural areas of Ogun State, Nigeria, Entrepreneurship, Education Department of Entrepreneurship and Spatial Management, Pedagogical University of Crakow, Poland, 18(1), 51-63.
• Ogunmuyiwa, M.S & Sofoluwe, N.A (2019). Cooperative financing and micro scale enterprises. IZVESTIYA, Journal of Economics, University of Varna, Bulgaria, 63(2), 117-132.
• Okibo BW, Makanga N (2014) Effects of microfinance institutions on poverty reduction in Kenya. International Journal Current Research Academic Review 2(2):76–95.
• Olugbenga, S & Mashigo. P (2017).The impact of microfinance on microenterprises. Investment Management and Financial Innovations, 14(3), 82-92.
• Olusanya, S,.O. Sufian, B.J. & Temi O.A. (2014). Can microfinance improve small and medium scale enterprises in Lagos State Nigeria? Journal of Economics and Finance 3(3):49-56.
• Osotimehin, K.O.; Jegede, C. A, Akinlabi, B. H and Olajide, O.T. (2012). An Evaluation of the. Challenges and Prospects of Micro and Small Scale Enterprises
• Pande, R., Papp, J., Field, E., & Rigol, N. (2013). Does the classic microfinance model discourage entrepreneurship among the poor? Experimental evidence from India. American Economic Review, 103(6), 2196-2226.
• Schrawwat, M. & Giri, A. (2016). The contribution of microfinance to poverty reduction in developing economies. Journal of Global Entrepreneurship Research, 6(1), 1-16.
• Sultan, J., & Masih, R. (2016). Microfinance and financial inclusion: A review. Journal of Applied Economic Sciences, 11(2), 332-347.
• Taiwo, J. N., Yewande, O. A., Edwin, A. M., & Benson, K. N. (2016). The role of microfinance institutions in financing small businesses. Journal of Internet Banking and Commerce, 21(1), 1-20.
• Yaqub, J. O. (2012). Micro-credit and welfare of micro entrepreneurs in Nigeria: A case study of Alimosho local government area of Lagos state. Journal of Business and Organizational Development, 4, 12-21.
• Zainal, S. R. M., Nik Abdullah, N. M., & Fikri, N. A. (2019). Microfinance and poverty alleviation: A systematic review. International Journal of Management, Accounting and Economics, 6(11), 667-680.
• Zhang, Z., & Ayele, Y. (2022). The role of micro enterprises in promoting economic growth and reducing poverty in developing countries. Journal of Business Research, 140, 466-474.
• Ogunmuyiwa, Michael Segun is an Associate Professor in the Department of Business Administration, Faculty of Administration and Management Sciences, Olabissi Onabanjo University, Ago-Iwoye, Nigeria. He has a brief stint in Sona Breweries PLC before joining the academia in 1996. Apart from teaching at both undergraduate and postgraduate levels, he has supervised over 500 undergraduate Projects and not less than 100 M.Sc. and M.B.A Dissertations as well as some Ph.D Theses. In addition, he has more than 70 publications in Books, Journals and Learned Conferences both locally and internationally. Dr. M.S Ogunmuyiwa is happily married with Children.
• Ahmed, M. D. (2015). The challenges facing microfinance institutions in poverty eradication: A case study in Mogadishu. International Journal of Humanities Social Sciences and Education (IJHSSE), 2(2), 56-62.
• Akingunola, R.O., Olowofela, E.O & Yunusa, L (2018). Impact of microfinance banks on micro and small enterprises in Ogun State, Nigeria. Binus Business Review: Management, Accounting And Hospitality Management 9(2):163-169.
• Armendáriz, B. and Morduch, J. (2010). The economics of microfinance. Second Edition, Mit Press Books, 1151-1152.
• Ashamu. S (2014). The impact of micro-finance on small-scale business in Nigeria. Journal of Policy and Development Studies, 9(1): 179-193.
• Augustine, P. & Asiedu, E. K. (2017). The role of small and medium enterprises in job creation and economic growth in Ghana. Journal of Social and Development Sciences, 8(1), 1-12.
• Babajide, A. (2012). Effects of microfinance on micro and small enterprises (MSES) growth in Nigeria. Asian Economic and Financial Review, 2(3), 463-477.
• Bamfo, A. (2022). The impact of micro and small-scale enterprises on economic development: Evidence from Ghana. International Journal of Social Economics, 49(1), 1-17.
• Bika, Z., Subalova, M., & Locke, C. (2022). Microfinance and small business development in a transitional economy: Insights from borrowers’ relations with microfinance organizations in Kazakhstan. Journal of Development Studies, 58(1), 183-203.
• Chikwira, C., Vengasai, E & Mandude, P (2022). The impact of microfinance institutions on poverty alleviation. Journal of Risk and Financial Management, 15(9): 393.
• Duvendack, M., Palmer-Jones, R., Copestake, J.G., Hooper, L., Loke, Y & Rao, N (2011). What is the evidence of the impact of microfinance on the well-being of poor people? London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
• Erdogan, M. (2019). Micro and small enterprises in Turkey: Their contributions to employment and economic growth. International Journal of Economics and Financial Issues, 9(2), 10-18.
• Franca, N. (2013). The impact of micro credit institutions on the development of small and medium enterprises in Anambra State. IOSR Journal of Business and Management, 14(5), 75-81.
• Khandker, S. R., Samad, H.A (2014). Microfinance growth and poverty reduction in Bangladesh. What does longitudinal data say? Bangledesh Development Studies, 37(1&2): 127-157.
• Mrindoko, A. and Pastory, D. 2022. The Contribution of Microfinance Institutions (MFIs) Services to Poverty Reduction among Micro and Small Entrepreneurs in Iringa Municipality, Tanzania. African Journal of Applied Research. 8, 1 (Apr. 2022).
• Noguei, J., Chitura, T., & Mhaka, C. (2020). Microfinance and job creation: A review of literature. Journal of Economics and Behavioral Studies, 12(1), 1-9.
• Ntiamoah, E. A., Amoako, G. K., & Ntiamoah, A. (2016). The impact of micro, small and medium scale enterprises on economic growth in Ghana. Journal of Entrepreneurship and Business Innovation, 3(1), 39-52.
• Ogunmuyiwa, M.S & Amida O.A (2022). The nexus between electronic payment system and entrepreneurial activities in rural areas of Ogun State, Nigeria, Entrepreneurship, Education Department of Entrepreneurship and Spatial Management, Pedagogical University of Crakow, Poland, 18(1), 51-63.
• Ogunmuyiwa, M.S & Sofoluwe, N.A (2019). Cooperative financing and micro scale enterprises. IZVESTIYA, Journal of Economics, University of Varna, Bulgaria, 63(2), 117-132.
• Okibo BW, Makanga N (2014) Effects of microfinance institutions on poverty reduction in Kenya. International Journal Current Research Academic Review 2(2):76–95.
• Olugbenga, S & Mashigo. P (2017).The impact of microfinance on microenterprises. Investment Management and Financial Innovations, 14(3), 82-92.
• Olusanya, S,.O. Sufian, B.J. & Temi O.A. (2014). Can microfinance improve small and medium scale enterprises in Lagos State Nigeria? Journal of Economics and Finance 3(3):49-56.
• Osotimehin, K.O.; Jegede, C. A, Akinlabi, B. H and Olajide, O.T. (2012). An Evaluation of the. Challenges and Prospects of Micro and Small Scale Enterprises
• Pande, R., Papp, J., Field, E., & Rigol, N. (2013). Does the classic microfinance model discourage entrepreneurship among the poor? Experimental evidence from India. American Economic Review, 103(6), 2196-2226.
• Schrawwat, M. & Giri, A. (2016). The contribution of microfinance to poverty reduction in developing economies. Journal of Global Entrepreneurship Research, 6(1), 1-16.
• Sultan, J., & Masih, R. (2016). Microfinance and financial inclusion: A review. Journal of Applied Economic Sciences, 11(2), 332-347.
• Taiwo, J. N., Yewande, O. A., Edwin, A. M., & Benson, K. N. (2016). The role of microfinance institutions in financing small businesses. Journal of Internet Banking and Commerce, 21(1), 1-20.
• Yaqub, J. O. (2012). Micro-credit and welfare of micro entrepreneurs in Nigeria: A case study of Alimosho local government area of Lagos state. Journal of Business and Organizational Development, 4, 12-21.
• Zainal, S. R. M., Nik Abdullah, N. M., & Fikri, N. A. (2019). Microfinance and poverty alleviation: A systematic review. International Journal of Management, Accounting and Economics, 6(11), 667-680.
• Zhang, Z., & Ayele, Y. (2022). The role of micro enterprises in promoting economic growth and reducing poverty in developing countries. Journal of Business Research, 140, 466-474.
• Ogunmuyiwa, Michael Segun is an Associate Professor in the Department of Business Administration, Faculty of Administration and Management Sciences, Olabissi Onabanjo University, Ago-Iwoye, Nigeria. He has a brief stint in Sona Breweries PLC before joining the academia in 1996. Apart from teaching at both undergraduate and postgraduate levels, he has supervised over 500 undergraduate Projects and not less than 100 M.Sc. and M.B.A Dissertations as well as some Ph.D Theses. In addition, he has more than 70 publications in Books, Journals and Learned Conferences both locally and internationally. Dr. M.S Ogunmuyiwa is happily married with Children.
How to Cite
Segun OGUNMUYIWA, Ph.D, Michael. 2024. “Do Micro Finance Banks Influence The Performance Of Small Scale Business Entrepreneurs In Ijebu North Lga, Ogun State, Nigeria?”. Studies in Business and Economics 27 (2). https://doi.org/10.29117/sbe.2024.0156.
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