The Impact of Microfinance Institution on the Economy of Nigeria

definition of microfinance institution

The Impact of Microfinance Institution on the Economy of Nigeria

Introduction to Microfinance

Mr. Sam Quinn

Word Count: 2241

Dec. 2, 2014

Table of Content Pg

Introduction 3

Definition of Terms 3

Concept of Microfinance 3

The Goals of Microfinance Institutions 5

Impact of Microfinance on the Economy of Nigeria 6

Negative Impact of MFIs on the country (Nigeria) 10

Conclusion

Introduction

Since the advent of microfinance institution in Bangladesh in the mid 1970’s, several countries have copied this financing model. The Nigerian governments over the years have had to grapple with poverty and unemployment. The realization that many of these poor and/or unemployed persons are not without skills, ideas and willingness to work, must have propelled the government to make finance accessible to them.

The seeming popularity of this model

among developing countries is predicated on poverty reduction prospect it offers. The Nigerian government cued into this popular thinking in 2005 when it inaugurated the microfinance institution scheme. This was founded to provide finance to economically active poor excluded from financing by conventional banks, provide employment, engender rural development and reduce poverty.

The introduction of microfinance institutions in Nigeria is the inability of Nigerian Deposit Money Banks to provide sufficient financial service to the rural poor. Microfinance institutions have taken up the challenges of the gap created by the Nigerian Deposit Money Banks. Microfinance institutions can be seen as an economic growth method intended to advantage the low income part of a given country like Nigeria, both rural poor and urban poor. This paper theoretically examines the impact of this institutions to Nigeria as a country.

Concept of Microfinance

Microfinance pertain to the.

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