THE IMPACT OF MICROFINANCE ON WELFARE AND POVERTY ALLEVIATION IN SOUTHWEST NIGERIA

ABSTRACT 

The study presented empirical findings on the impact of Microfinance on welfare and poverty alleviation in Southwest Nigeria.  It also examined Microfinance as key to poverty alleviation and economic development.  It assessed the extent to which Microfinance Institutions had successfully helped the poor to improve their standard of living and social status.  The study employed multiple regression analysis of the Ordinary Least Square (OLS) technique of estimation in order to make tentative predictions concerning outcome variable.  The Linear Probability Model was also adopted in the study.  This study establishes that Microfinance Programme have impacted the businesses and lives of the beneficiaries (Microfinance Clients) in several positive ways particularly in their economic circumstances. It also gave them access to essential life-enhancing facilities and services.  It suggested that Microfinance Institutions in Nigeria should seek long-term capital from the Pensions and Insurance companies so that they can grant larger volumes of loans to greater number of their clients.  They should also strive to put in place procedures, policies and products that would ensure gender responsiveness and equity. In order to enhance healthy competition among the Microfinance Institutions, there should be a mandatory policy for the Microfinance Institutions to publish their interest rates and other charges at frequent intervals. This would improve the levels of efficiency of the Microfinance Institutions.

List of Abbreviations and Acronyms 
ACGS " Agricultural Credit and Grant Scheme 
ADB " African Development Bank  
ASHO " Anambra Self Help Organization 
BOI " Bank of Industry 
BIDS " Bangladesh Institute of Development Studies 
CAMELS 
(C) Capital Adequacy 
(A) Asset Quality 
(M) Management  
(E) Earnings  
(L) Liquidity  
(S) Sensitivity to Market Risk 
CB " Community Banks 
CBN " Central Bank of Nigeria 
CGAP " Consultative Group to Assist the Poorest 
CMFB " Covenant Micro Finance Bank 
COWAD " Community Women and Development 
DEC " Development Exchange Centre 
EEC " European Economic Commission 
EMPL " Employment 
FADU " Farmers Development Union 
FCF " Full Cycle Fund 
GDP " Gross Domestic Product 
GFF " Good Faith Fund 
GPP " Global Poverty Publicat ion 
HND " Higher Nat ional Diploma 
IFAD " International Fund for Agricultural Development  
JD " Jordanian Dollar 
LAPO " Lifting Above Poverty Organization 
LOP " Levels of Profit 
MAIN " Microfinance African Institutions Network 
MDGs " Millennium Development Goals 
MFBs " Microfinance Banks 
MFIs " Microfinance Institutions 
MSMEs " Micro Small and Medium Scale Entreprises 
NACB " Nigerian Agricultural and Cooperative Bank 
NACRDB " National Agricultural Cooperative and Rural Development 
Bank 
NDE " National Directorate of Employment 
NDIC " Nigerian Deposit Insurance Corporation 
NEEDS " National Economic Empowerment and Development 
Strategy 
NGO " Non Governmental Organization 
OSI " Open Society Institute 
PAR " Portfolio At Risk 
PB " Peoples Bank 
PRSP " Poverty Reduction Strategy Paper 
RBP " Rural Banking Programme 
ROA " Return On Asset  
SEAP " Self Reliance Economic Advancement Programme 
SHG " Self Help Group 
SMEs " Small and Medium Scale Entreprises 
TEACH " Training, Education And Credit Health 
VEF " Village Entreprise Fund 
WDI " Women Development Init iat ive 
WSEP " Women Self Employment Project