THE ROLE OF MICRO FINANCE BANK ON THE SOCIO-ECONOMIC EMPOWERMENT OF BENEFICIARIES IN EGOR LOCAL GOVERNMENT AREA OF EDO STATE

Abstract

The practices of microfinance services for the poor have grown immensely since its beginning in the 1970s. It has become one of the most popular poverty reducing strategies in the world. The study aimed at exploring the contribution of microfinance products such as microcredit, micro insurance and micro saving to the youth who make up to more than 60% of the country’s population. The contribution involved the role of microfinance in enhancing entrepreneurship development, sighting problems surrounding the credit barriers, and creation of employment through innovative business activities. The research employed descriptive research design using simple random sampling which enables every member of the population to have an equal and independent chance of being chosen as respondents and also simplest, most convenient and bias free choosing method. The data was collected with the use of questionnaire and was analyzed using the quantitative techniques. The study results show that microfinance banks have played a key role in economic empowerment of beneficiaries in Egor Local Government area of Edo State. Loan repayment default was largely a result of non-supervision of borrowers by the Micro Finance Institutions, as well as inadequate training of borrowers on utilization of loan funds before them receiving funds. The study recommended that the government, investors and other interested stakeholders should be involved in key decisions affecting micro financing. This would help bring new ideas which Micro Finance Institution can be able to tap and implement to boost the institutions.