Microfinance Bank and Poverty Reduction in Uyo Local Government Area, Akwa Ibom State, Nigeria
Keywords:
Microfinance bank, Poverty reduction, Credit facility, Business growth, UnemploymentAbstract
This study examined the role of microfinance banks in poverty reduction efforts in Uyo Local Government Area of Akwa Ibom State, Nigeria. Three (3) research questions were raised to guide the study. The research design adopted for the study was the survey design. Data were collected through questionnaires while respondents were selected through convenience sampling technique. A total of three hundred and twenty-three (323) respondents were selected as the sample, through the use of Topman Formula at 5% level of tolerable error. Out of the three hundred and twenty-three (323) copies of the questionnaire that were printed and distributed, two hundred and forty-five (245) were properly filled and returned and final analysis was based on this figure. Analysis was carried out using frequency counts and percentages. Based on the analysis made, it was observed that, microfinance banks in Uyo LGA are relatively effective in enabling the poor to access credit facilities, despite some concerns about collateral requirements. It was also observed that microfinance banks significantly contribute to business growth by providing credit, training, and financial literacy programs. These services enable entrepreneurs to start or expand their businesses and increase their income. Lastly, the findings suggested that microfinance banks contribute to reduction of unemployment by supporting self-employment. However, the community-wide impacts of these businesses were discovered to be limited. In light of these findings, the study suggested that microfinance banks broaden their financial inclusion, boost loan amounts and flexibility, improve non-financial support services, and create focused unemployment reduction initiatives, among other things.