Critical Analysis of the Performance of Microfinance Bank.


The goal of this research work is to carry out a critical analysis of the performance of microfinance bank in terms of meeting its objective on financial sustainability and economic empowerment.

Umuchinemere Procredit Microfinance Bank one of the vibrant private owned micro-finance bank in operation in the eastern part of our country Nigeria, was therefore selected as case study of this research.

The rationale behind the research work was the paucity situation of credit facilities available to the poor class of the society and effort of the government to remedy the issue by formulating policies that promotes participation of private stakeholders in economic empowerment through financial intermediation targeted to the poor economic unit.

The problem the research is about to solve therefore, is to analyze the performance of the microfinance bank which is a 100% private initiative, in the area of financial sustainability and economic empowerment.

Suggestion from previous authors in the area of study was review for recommendation and solution on how to run an efficient and profitable funding unit by applying some of the principles as follows; corporate governance, financial sustainability,

welfare impact, outreach to the poor e.t.c. considering the nature of study, the research design used was a case study of Umuchinere Procredit Microfinance Bank (UPMFB).


Background of Study

The practice of microfinance in Nigeria is culturally rooted and dated back several centuries. The traditional micro finance institutions provide access to credit for rural and urban low-income earners.

They are mainly informal self help groups (SHGs) or Rotating Savings and Credit Association (ROSCAs) types. Other providers of microfinance services include savings collector and cooperative societies.

The informal financial institutions generally have limited outreach due primarily to paucity of loanable funds.

In order to enhance the flow of financial services to Nigeria rural areas, government has, in the past, initiated a series of publicly financed micro/rural credit programs and policies targeted at the poor.

Notably among such programmes were rural banking programme, sectoral allocation of credits, concessional interest rate, and agricultural credit guarantee scheme (ACGS).

Other institutional arrangements were the establishments of Nigeria Agricultural and Cooperative Bank Limited (NACB), National Directorate of Employment (NDE), Nigerian Agricultural Insurance Cooperation (NAIC), the Peoples Bank of Nigeria (PBN).


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