The Impact of Microfinance Institution on the Economy of Nigeria

2630 Words Dec 17th, 2014 11 Pages
Impact of Microfinance Institution on Nigeria Economy
Ghana Christian University College
SDM 201222101014
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

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
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Micro-finance is a term used to refer to different methods for giving poor people access to financial services. Irobi (2008) defined microfinance as the provision of financial services such credits (loans), savings, micro-leasing, micro-insurance, and payment transfers to economically active poor and low income household to enable them engage in income generating activities or expand/grow the small businesses (Par. 5).
Microfinance can be defined as a development tool used to create access for the economically active poor to financial services at a sustainably affordable price (CBN, 2005). Eluhaiwe (2005) opined that micro finance is the provision of thrift, credit and other financial services and products in very small amounts to the poor to enable them to raise their income levels and improve their standard of living.
Micro finance has also been defined as the provision of very small loans that are repaid within short period of time and is essentially used by low income individuals and households who have few assets that can be used as collateral (Ukeje, 2005). In all the different kind of definition of Microfinance, it can be seen that it is a financial intervention that focuses on the low-income group of a given society. The intervention primarily involves

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