IMPACT OF MICROFINACE BANKS’ SERVICES ON POVERTY RATE IN NIGERIA

Yahaya Abdulrazaq Akanni

Abstract


The vital role played by the microfinance banks in reduction of poverty rate has been well documented. Despite this vital role of microfinance banks on the economy, the microfinance banks in Nigeria have remained poorly developed. Hence, the need to examine the impact of microfinance banks’ services on poverty rate in Nigeria. The Autoregressive Distributed Lag (ARDL) model was employed on the time series secondary data sourced from World Bank’s World Development Indicators and Central Bank of Nigeria Statistics Bulletin to achieve the objectives. The study found that microfinance banks’ loans have a negative impact on poverty rate in Nigeria. It was also revealed that microfinance banks’ deposits have a negative impact on poverty rate in Nigeria while interest rates have positive impact poverty level in Nigeria. The study concluded that microfinance banks’ services reduce poverty rate in Nigeria. The study recommended that effective policy should be made to achieve improved loans mobilization to the active poor, as well as encourage savings among Nigerians.


Keywords


Impact, Microfinance Banks, Services, Poverty Rate, Nigeria.

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