Assessment of the Role of Micro-Finance Banks in Business Development in Adamawa State.


1.1 Background of the Study

With all the measures implemented to encourage new business, help existing businesses grow and to ultimately improve the economy, there is still a growing concern of business development.

As a means to address this concern, microfinance banks were introduced to cater especially for the poor low income earners who are underserved by conventional commercial banks.

According to Echo Microfinance, microfinance banks are institutions licensed by the Central Bank of Nigeria (CBN) to operate as financial institutions that offer savings, loans, local funds transfer and other financial services needed by the poor economically active Small and Medium sized Enterprises owners, to operate and expand their businesses.

A large share of the total population of poor SME owners are excluded from services rendered by conventional financial institutions.

According to CBN, a study by EFinA back in 2010 showed a slight increase in the rate of those served by formal financial market.

The study revealed an increase of 1.3 percent within the first five years after launching microfinance banks.

All economies of the world are characterized by commercial activities which consist of all businesses or business operations in the economy.

Despite the great desire by Nigerians to become entrepreneurs, only 40% actually start up businesses and only 20% of these start ups survive (UNIDO, 2015).


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Adeoye, A. F. and Emmanuel, O.O (2015). Effect of Micro-Finance Banks on Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria. International Journal of Banking, Finance, Management and Development Studies, 1(9). Pp. 141-156

Adeusi, S. O. (2015). The impact of Microfinance on Entrepreneurial Development in Nigeria. International Journal of Banking, Finance, Management and Development Studies, 1(12). Pp. 189-222

Asor, A. E., Essien, M. E., and Ndiyo, N. (2016). The Impact of Microfinance Banks on Small Scale Businesses in Cross River State: A Case Study of Calabar Metropolis. International Journal of Innovative Finance and Economics Research 4(1):25-31.

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