Effect of Microfinance Banks on the Growth of Selected Small and Medium Scale Enterprises in Makurdi Metropolis, Benue State
DOI:
https://doi.org/10.53555/nnbma.v5i7.784Keywords:
Microfinance, Bank, Growth, SMEs, Benue, NigeriaAbstract
This study examined the effect of microfinance banks on the growth of selected small and medium scale enterprises in Makurdi Metropolis, Benue State.The study was anchored on Pecking Order theory. The researcher used both primary and secondary sources from a population of 960 and a sample of 282 respondents obtained by the use of a structured questionnaire. The data collected were analyzed using descriptive statistics such as frequency, simple percentage and the relationship between the variables of the model was tested using multiple linear regression analysis. The result of the regression analysis indicates that a positive relationship exist between Credit by Microfinance (CMF) Job Creation (JOC) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). A positive relationship exist between Credit by Microfinance and Business Expansion (BEX) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). A negative relationship exist between Savings Mobilization and the Growth of Small and Job Creation (JOC) of selected SMEs in Makurdi Metropolis and the relationship is not statistically significant (p>0.05). A positive relationship exist between Savings Mobilization (SMB) and Business Expansion (BEX) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). It was concluded that micro finance does enhance the job creation and expansion capacity of small business in Nigeria. It was recommended among others that microfinance bank should adopt similar strategies adopted by deposit money banks in deposit mobilization because it is by so doing that they will be able to grant quality loans to entrepreneurs which will lead to job creation in the economy.
References
Abiola, I., & Salami, A.O. (2011). Impact of Microfinance Banks on Standard of Living. International Journal of Business Management, 5(1):27-32.
Acha, I. A. (2012). Microfinance Banking in Nigeria: Problems and Prospects. International Journal of Finance and Accounting, 1(5), 106-111.
Aderibigbe, J. O. (2001). The Role of the Federal Sector in Poverty Reduction, Central Bank of Nigeria Bullion, 39(4), 13-24.
Arbaurgh, J.B., & Sexton, D.L. (1996). New Firm Growth and Development: A Replication and Extension of Reynolds’ research. Journal of Enterprising Culture, 4(1):19-36
Babajide, A. A. (2011). Effects of Micro financing on Micro and Small Enterprises (MSEs) in South West in Nigeria. Being a PhD Thesis submitted in Partial Fulfillment of the Requirements for the Award of PhD Banking and Finance of the Department of Banking and Finance, College of development Studies, Covenant University, Ota, Nigeria.
Bello, A. R. (2015). Empire Trust Microfinance Bank: Lagos. The Punch, p. 1.
Berger, A. N. & Udell, G. F. (1998). A More Complete Conceptual Framework for SME Finance. In: Small and Medium Enterprises: Overcoming Growth Constraints World Bank, MC13-121, October 14-15.
Brüderl J, Preisendörfer P, Ziegler R (2012). Survival Chances of Newly Founded Business Organizations. Am. Sociol. Rev., 57: 227-242.
CBN (2014). Understanding Monetary Policy Series No.43: The Informal Financial Market inNigeria.www.cbn.gov.ng retrieved 31st July, 2017.
Central Bank of Nigeria (2005).Guidelines and Procedures for the Establishment of Microfinance Banks in Nigeria. CBN Bullion, 2005.
Chaston, I. and Mangles, T. (2017), Competencies for growth in SME sector manufacturing ?rms, Journal of Small Business Management, 35(1):32-41.
Chittenden, F., Hall G. and Hutchinson, P. (1996). Small firm growth, access to capital markets and financial structure: Review of issues and an empirical investigation. Small Business Econ., 8: 59-67.
Ediomo-Ubong E. Nelson and IboroEkpo Nelson (2010). Micro-Credit Programme and Poverty Alleviation in Rural Nigeria: A Case Study of Akwa Ibom State. International Journal of Economic Development Research and Investment, vol. 1 nos. 2 & 3 2010. Retrieved 10th June, 2017.
Ehigiamusoe, G. (2016). Risk management in microfinance. Paper presented at a Workshop Organized by the CBN for Directors of Potential Microfinance Banks, CBN Owerri, 17-19 August, 2006.
Esteve-Pérez, S. and Mañez-Castillejo, J. A. (2008). The resource-based theory of the firm and firm survival. Small Business Economic. 30(1): 231-249.
Goffee, R. and Scase, R., (2015). Entrepreneurship in Europe (Routledge Revivals): The Social Processes. Routledge
Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1995). Multivariate Data Analysis. Englewood Cliffs, NJ: Prentice-Hall.
Hall, G.C., P.J. Hutchinson and N. Michaelas, 2004. Determinants of the capital structures of European SMEs. Journal of Business Finance and Accounting, 31: 711-728.
Hannan, M. T. (2018). Rethinking age dependence in organizational mortality: logical formulizations. American Journal of Social Sociology, 104(2), 126-164.
Holmes, S. and Kent, P. (1991). An empirical analysis of the financial structure of small and large Australian manufacturing enterprises. Journal of Small Business Finance, 1: 141-154
Idowu, A. O, Ambali O. I. and Otunaiya A. O. (2010). Microfinance and Small Scale Pig Business in Osun State, Nigeria. Asian Journal of Business and Management Sciences 1(9):01-08. www.ajbms.org. Accessed 10th July, 2018.
Iganiga, B. O. and Asemota, A. (2008). The Nigerian Unorganized Rural Financial Institutions and Operations: A Framework for Improved Rural Credit Schemes in a Fragile Environment. Journal of Social Sciences, 17(1): 63-71.
Ketu, A. A. (2008). Microfinance Banks in Nigeria: An Engine for Rural Transformation “West African Institute for Financial and Economic Management. Lagos, Nigeria.
Kolvereid, L. (2016). Growth Aspirations among Norwegian Entrepreneurs. Journal of Business Venturing, 7(3):209–222.
Kolvereid, L. and Bullvag, E. (2016). Growth Intentions and Actual Growth: The Impact of Entrepreneurial Choice. Journal of Enterprising Culture (JEC), 4(1):1-17
Kpelai, S.T. (2010). Financing Options and Constraints to Small Businesses in Benue State North-Central Nigeria. Mkar Journal of Management and Social Sciences2(1), 1-12.
Lv, G. S. (2000). Small and Medium Enterprises Research. Shanghai: Shanghai University of Finance and Economics Press. (In Chinese).
Masurel, E. and Montfort, K.V. (2016). Life cycle characteristics of small professional service firms. Journal of Small Business Management, 44(3):461- 437
Myers, S.C., (1984). The capital structure puzzle. Journal of Finance, 39(3): 575-592.
Ndugbu, J. O., Ojiegbe, M., Lawrence, K. and Okere, M. J. (2015). Innovative approach to SME financing in Nigeria: a review of small and medium industries equity investment scheme (SMIEIS). Journal of Social Science, 11(3):219-227.
Ngozi, G. I (2012). Women Entrepreneurship and Development: The Genering of Microfinance in Nigeria. Presented at the 8th International Interdisciplinary Congress on Women, 21-26 July, 2002, Makerere University, Kampala-Uganda.
Ojo, T.A. (2009). A study of the Role of Banking and Financing Institutions and Markets in Development Economy. London: Graham Burn
Romano, C. O., Tanewiski, G. A. and Smyrnios, K. X. (2001). Capital Structure Decision Making: A Model for Family Business. Journal of Business Venturing, 16(3):285-310.
Sambe, L., Korna H. and Abaniyan, P. (2013). The Experience of Microfinance Banks Operation in their operational location. Paper presentation at workshop on microfinance banking in Kano State.
SMEDAN (2017), Survey Report on Micro, Small and Medium Enterprises (MSMEs) in Nigeria
USAID (2015). USAID Fiscal Year 2015 Agency Financial Report. Online @ https://www.usaid.gov/sites/default/ files/documents/1868/USAIDFY20 15AFR_508a.pdf
Wucinich, W. (2009). How to Finance a Small Business. Journal of Management Accounting, 61(5):16-18.
Downloads
Published
Issue
Section
License
Copyright (c) 2019 Journal of Advance Research in Business Management and Accounting (ISSN: 2456-3544)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Terms & Condition
Submission -
Author can submit the manuscript through our online submission process or email us at the designated email id in contact details.
The other mode of submission not accepted than online and email.
Before submission please read the submission guidelines.
NN Publication accepts only article submitted in pdf/doc/docx/rtf file format. Another format except given file formats will no be considered .
Author will be responsible for the error mistakes in the submission files. The minor changes can be done without any cost after publication. But for major changes NN Publication may charges you the editing charges.
Publication (Online) -
The online publication is scheduled on last date of every month, but it can be delayed by 24 to 48 hours due to editorial process if huge number of articles comes to publish in single issue.
Automatic notificatation email will be sent to the all users on publication of an issue, so its author’s duty to check their email inbox or SPAM folder to get this notification.
After publication of article author can not withdraw their article.
If editor’s found any issue after publication of article then the NN Publication have the authority to remove the article from online website.
No refund will be provided after online publication of article.
Publication (Print) -
The print copy publication are sent as per the author’s request after 2 weeks of online publication of that issue.
NN Publication will ship the article by India Post and provide the consignment number on dispatch of print copy.
NN Publication follows all the guidelines of delivery provided by IndiaPost and hence not responsible for delay in delivery due to any kind of reasons.
Refund of hard copy will not be provided after dispatch or print of the journal.
NN Publication will be responsible for raise a complain if there is any issue occurs in delivery, but still will not be responsible for providing the refund.
NN Publication will be responsible to resend the print copy only and only if the print copy is lost or print copy is damaged in delivery / or there is delay more than 6 months.
According to India Post the delivery should be completed with in 1-3 weeks after dispatch of articles.
Privacy Policy-
NN Publicationl uses the email ids of authors and editors and readers for sending editorial or publication notification only, we do not reveal or sell the email ids to any other website or company.
