Microfinance Banks and Economic Development in Nigeria (2013-2023)

Okeke Ijeoma Chinwe (Ph.D)
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Okeke Ijeoma Chinwe (Ph.D): Department of Banking and Finance, Nnamdi Azikiwe University, Awka Anambra State

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 12, 1424-1432

Abstract: This study examines the effects of microfinance banks on Nigeria’s economic development, specifically examining HDI, investments, loans, and deposits. Utilizing multiple regression analysis on data from 2013 to 2023, the study aims to assess how microfinance investments, loans, and deposits influence Nigeria’s economic development. Data from all micro finance banks were sourced from the Central Bank of Nigeria’s Statistical Bulletin and Annual Reports. The results indicate that In contrast, microfinance loans have a negative, insignificant effect on HDI. Deposits from microfinance have a positive and insignificant effect on HDI. microfinance investments have a positive and significant effect on HDI. The study suggests that microfinance institutions should focus on investments in social sectors, such as education, healthcare, and housing, to foster human development. This study also questions the general assumption that microfinance consistently enhances economic and human development, emphasizing the importance of context-specific factors like financial literacy for effective microfinance outcomes.

Date: 2024
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