The Impacts Of Micro Financing On The Performance Of Women Entrepreneurs In Kaduna State

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The Impacts Of Micro Financing On The Performance Of Women Entrepreneurs In Kaduna State


Abstract


This study was carried out to the impact of micro financing on the performance of women entrepreneurs using Kaduna Metropolis as a case study. Specifically, the study was aimed at ascertainingthe impacts of micro financing on the performance of women entrepreneurs in Kaduna state. The study employed the survey descriptive research design. A total of 20 responses were purposively enrolled and validated from the survey. From the responses obtained and analysed, the findings revealed that the level of impact of micro financing on the performance of women in Kaduna state is high. The study recommend Since loan has a positive impact on business performance, entrepreneurs can apply for more money at any time. This they can do by simply replacing their current loan agreement with a new one for a larger amount. They can also enter into a second agreement by opening a new loan and running the two side by side.


Chapter One


Introduction

1.1 Background to the Study

Microfinance constitute the facilitation of financial services to meet the needs of low income individuals such as micro-entrepreneurs, through the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance and enhancing simple payments services required by micro-entrepreneurs and economically active poor people who cannot gain access to financial services provided by the formal banking sector.(USAID, 2000). The loans provided are small in amount and directed for entrepreneurial ventures. The loans are collateral free and grouped based and mostly direct to women entrepreneur, generally with low interest charges or interest free with a focus on women and poor clients The focus being shifted to women is due to their ability to handle meager amount of money profitably (UNITUS, 2000


1.2 Statement of the Problem

Microfinance constitute the facilitation of financial services to meet the needs of low income individuals such as micro-entrepreneurs, through the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance and enhancing simple payments services required by micro-entrepreneurs and economically active poor people who cannot gain access to financial services provided by the formal banking sector.(USAID, 2000).The inability of the poor and small entreprenuers to access conventional banking services precipated the formulation of the microfinance policy to address the financial need of this poor and vulnerable segment of the society particularly the women. The loans provided are small in amount and directed for entrepreneurial ventures. The loans are collateral free and grouped based and mostly direct to women entrepreneur, generally with low interest charges or interest free with a focus on women and poor clients The focus being shifted to women is due to their ability to handle meager amount of money profitably (UNITUS, 2000).The research therefore seek to investigate the impact of micro financing on the performance of women entreprenuers in kaduna state

Several years after the policy on micro financing, a greater number of the poor and vulnerable poor segment are yet to fully maximize the benefit of financial services of obtaining micro credit facility for entrepreneurial businesses. It is pertinent to note that while the microfinance bank are willing to disburse funds to this segment they are however constraint by limited financial resources to meet the large number of client wanting to obtain micro credit. Savings deposit is low due to the nature of the activities carried out by the segment. Consequently there is the need to re-appraise the activities of micro financing on the performance of women entreprenuers with a view to determing the challenges Confronted by micro finance banks towards the effective delivery of their constitutional mandate to provide financial service to the economically active but poor segment of the society particularly the women. Therefore the problem confronting the research is to determine the impacts of micro financing on the performance of women entrepreneurs in Kaduna state


1.3 Objectives of the Study

To determine the impacts of micro financing on the performance of women entrepreneurs in Kaduna state


1.4 Research Questions

What is the level impact of micro financing on the performance of women entrepreneurs in kaduna state


1.5 Significance of the Study

The study shall elucidate on the role and impact of microfinacing on the performance of women entreprenuers in kaduna state


1.6 Research Hypothesis

  • Ho The level of impact of micro financing on the performance of women in Kaduna state is low
  • Hi The level of impact of micro financing on the performance of women in Kaduna state is high

1.7 Scope of the Study

The study focuses on the appraisal of the impact of micro financing on the performance of women entreprenuers in Kaduna state.


1.8 Limitations of the Study

The study was confronted with some constraint such as logistics and geographical factor.


1.9 Definition of Terms

Micro- Finance Bank Defined

Microfinance constitute the facilitation of financial services to meet the needs of low income individuals such as micro-entrepreneurs, through the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance and enhancing simple payments services required by micro-entrepreneurs and economically active poor people who cannot gain access to financial services provided by the formal banking sector.(USAID, 2000). The loans provided are small in amount and directed for entrepreneurial ventures. The loans are collateral free and grouped based and mostly direct to women entrepreneur, generally with low interest charges or interest free

Entrepreneurship Defined

Entrepreneurship is the ability to identify and venture into new business opportunities with the view of starting, owning and operating a business.


Chapter Five


Conclusion and Recommendation

5.1 Conclusion

In this study, our focus was to examine the impact of micro financing on the performance of women entrepreneurs using Kaduna Metropolis as a case study. The study specifically was aimed at ascertaining the impacts of micro financing on the performance of women entrepreneurs in Kaduna state. The study adopted the survey research design and randomly enrolled participants in the study. A total of 20 responses were purposively selected and validated from the enrolled participants where all respondent are entrepreneurs in Kaduna Metropolis.
The findings revealed that the level of impact of micro financing on the performance of women in Kaduna state is high.


5.2 Recommendation

Based on the responses obtained, the researcher proffers the following recommendations:

  1. Since loan has a positive impact on business performance, entrepreneurs can apply for more money at any time. This they can do by simply replacing their current loan agreement with a new one for a larger amount. They can also enter into a second agreement by opening a new loan and running the two side by side.
  2. Still on loans, as we have seen that loans contributes greatly to performance, the MFB should device ways to extend the loan periods beyond the maximum loan size to match varying borrowing powers of clients so as to enable the entrepreneurs have adequate time to invest the loan and use the returns for repayment. The MFBs can device ways such as adopting to extend the loan period of their clients by giving them a flexible borrowing option, such as loans of ₦ 10,000 – ₦ 50,000 to be repaid over a maximum period of 5 years, while loans of ₦ 50,000 -10,000 to be repaid over a maximum period of 7 years. At the same time, repayment should include a grace period with reasonable schedule. Still in line with loans, one of the ways that performance can be enhanced is to raise the minimum loan size. This can be operational if the government can help to supplement the funding of MFBs in order for the MFBs to continue to give out loans. It was observed from the research how an entrepreneur left a particular MFB to another MFB because according to her, her business had expanded and the small loan she was receiving from her former bank was not able to meet her demand.
  3. In order to encourage issuing of loans by MFBs, CBN should relax their regulations when it comes to MFBs as the operation of MFBs is quite different from that of the Deposit Money Banks (DMBs) and instead formulate policies that are suited to the operations of a MFB considering the fact that the DMBs serve as correspondence banks to MFBs and as such one should not expect a MFB to function as its correspondence bank.. This will in turn affect the operation of the MFBs which will manifest in their relationship with their clients thereby encouraging borrowing by the clients. Also MFBs should seek long term funds from the pension and insurance companies in the country. This will enable them grant larger volume of loan and to greater number of people which will improve their outreach level.

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