The Contributions of Microfinance Banks to Nigeria’s Economic Growth

Abstract

The study examined the impact of microfinance bank on the economic growth in Nigeria. The specific objectives were to examine the impact of micro loans, micro investment, micro deposit and microfinance bank contributions to agricultural production on economic growth in Nigeria. The study adopts ex-post facto research design. Ex post facto research is a design that begins after an event has occurred and without the interference of the investigator.  This is a time series and country specific research as such the population is centred on Nigeria. Time series research is a specific way of analyzing a sequence of data points collected over an interval of time. The research is not firm specific rather, it is country specific as such the population and same are the same. The study covers an interval of 29 years (1995 2023). Data collected were analysed using descriptive statistics and inferential statistics. The result from the analysis revealed that there exist a positive and insignificant between microfinance loan and economic growth in Nigeria, there exist a significant positive relationship between microfinance investment and economic growth in Nigeria, there exist a significant positive relationship between microfinance deposit and economic growth in Nigeria and there exist a significant positive relationship between agricultural production and economic growth in Nigeria. Based on the findings the study further recommends that in other to boost the economy microfinance should advance more loans to the public, microfinance institutions should channel very high proportion of their credits to the productive and real sectors of the economy for valuable impact of their operations on Nigeria’s economic growth and Microfinance banks (MFBs) ought to lead in maintaining ethical and professional standards by providing soft loans to reliable and promising entrepreneurs.