MICROFINANCE_INSTITUTION_IN_NIGERIA_A_CO.docx - MICROFINANCE INSTITUTION IN NIGERIA A CONVERGENCE OF SUSTAINABLE ECONOMY AND CAPACITY BUILDING Abstract

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MICROFINANCE INSTITUTION IN NIGERIA, A CONVERGENCE OF SUSTAINABLE ECONOMY AND CAPACITY BUILDING. Abstract This buttresses the importance of financial sustainability a key factor in Sustainable Economy as to managing the pool of citizenry who need access to finance and loans. The article enunciates active business ventures and owners who need financial support and the availability to them. More importantly, is that it submits the impact of these financial accessibility from microfinance institutions to these individuals, micro-investors and the impending or positive effect on their businesses and ventures, highlighting the positive cum advantageous impacts relatively to economic sustainability from the activities of microfinance institutions by enunciating their different modes of operation. Microfinance and its contribution to SMEs and GDP in Nigeria Microfinancing although has been practiced in developed countries but the system actually gained prominence in developing and emerging economies in the start of the millennia. From my personal experience as I have worked with four different microfinance organizations, I can boldly say that the system is very efficient and beneficial, particularly to micro or small and medium scale enterprises or entrepreneurs, hence the need for the viability and sustenance witnessed in the sector and industry. In my sophomore and particularly in Development Economics class in 2003/2004 academic session, we were given an assignment on comparison of Nigeria and Bangladesh using emerging micro- financing sector in both countries. Then the economic cum financial concept of money lending and micro-financing was gaining momentum and popularity in the third world and in these two economies. Sequel to the existing fact that Nigeria and Bangladesh have some economic similarities in terms of structure, population, level of development, income group and relatively peculiar market economies. Objectively, this article is centred on Microfinance banks in Nigeria, as at 2004 the sector has had roots in Bangladesh and was emerging in Nigeria. We had few Microfinance banks in Nigeria prior to the millennial, that was if any existed actually, only finance houses acted as creditors, same as the numerous commercial banks, and their services, interest charges on loans were not for the consideration of small and medium scale enterprises (SMEs) or investors. Then came the Microfinance banks and institutions which have been contributory to SMEs, GDP and Nigerian economy. The obtainable economically remains that SMEs are economic agents which help drive the economy as they bridge the gap between the multinational corporations or companies and the direct consumer. The small and medium-sized investments or investors also have duties which span their role as one of the factors of production to main actors in channels of distribution as they act as middlemen between producer or manufacturer’s connection to retailers and direct consumers. More
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