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Microfinancing for Poverty Reduction and Economic Development; a Case for Nigeria

Omotola Awojobi and Murad Bein

MPRA Paper from University Library of Munich, Germany

Abstract: The main focus of this research is to juxtapose the features of microfinancing and the institutional forbearance of economic development in Nigeria. Based on empirical study, it has been observed that poverty is multifaceted and its persistence is due to lack of productive resources. The Nigerian case reveals that the major constraint to improving the standard of living of the poor is capital (finance). This has restricted their extensive participation in economic activities which could improve their lives. For this study, our theoretical a priori expectation is that provision of microfinance services such as savings and microloans have direct impact on GDP. A causal relationship will be established and evaluated with the ‘t-test’ statistic, while the relevance of the independent variables in explaining the subject will be justified based on the F-statistic test and R2 coefficient of multi-determination. Also, using a lin-log regression model, economic growth shall be regressed on poverty level in Nigeria. This will create an assertion whether Nigeria needs a systematic reinforcement of the microfinance mechanism to propagate a soothing trend for poverty reduction and economic growth.

Keywords: Microfinance; Poverty; Economic Development; Economic Growth; Financial Services; Gross Domestic Product (search for similar items in EconPapers)
JEL-codes: G21 I38 O17 (search for similar items in EconPapers)
Date: 2010-12-10, Revised 2011-04-11
New Economics Papers: this item is included in nep-afr, nep-hme and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in International Research Journal of Finance and Economics 72.1(2011): pp. 159-168

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