Nigerias Microfinance Bank Sector

Author : Christiana E.E. Okojie
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (69 download)

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Download or read book Institutional Environment and Access to Microfinance by Self-employed Women in the Rural Areas of Edo State, Nigeria written by Christiana E.E. Okojie and published by . This book was released on 2009 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The major objective of this study was to examine the relationship between the institutional environment of microfinance and access of rural women to microfinance. Focus group sessions were held with groups of rural women who are clients of formal and informal Microfinance Institutions (MFIs) in Esan Local Government Area of Edo State, Nigeria. The two formal institutions were the Ekpoma branch of Lift Above Poverty Organization Microfinance Bank and the Ujoelen Microfinance Bank. Fifteen case studies with fourteen women and one man were also examined. They had all accessed loans from formal and/or informal MFIs. Main findings Institutional environment: The traditional informal microfinance institutions still exist side by side with the formal MFIs. These informal mechanisms have not been absorbed into the regulated microfinance sector. They are still very popular with rural women, many of whom have belonged to these "meetings" for over a decade. These informal thrift and credit societies still remain the only source of funds available to poor women who have not been able to access the formal sector microfinance institutions. Why are rural women poor? According to respondents, rural women in the study area are poor because of heavy family responsibilities. They have to feed their family when the husband does not provide because they cannot leave their children hungry. Additionally, they pay their children's school fees as they do not want their children to be driven out of school. As a result of all these factors, women do not have enough capital for their trading and farming activities and cannot save. The women are hardworking and if they have capital they can trade with it and lift themselves out of poverty. The respondents gave examples of successful business women in the area that succeeded because they had access to credit from LAPO and other sources. Why it is difficult for women to borrow from banks? Rural women in particular find it difficult to borrow from banks because most do not have bank accounts, they have no collateral to present to the bank, and many women do not know the procedures for accessing bank loans. As they explained, while men inherit land and other property which they can use as collateral, women do not inherit property. They also said that women need their husband's consent to borrow money from the bank. Sources of microfinance for rural women: The main source of finance for the majority of rural women is their contribution from their savings/market association. However, with the advent of microfinance banks, more rural women are now accessing formal microfinance institutions. Rural women have accessed loans from the Lift Above Poverty Organization (LAPO) and Ujoelen Microfinance Banks. One of the women's groups also accessed credit from a government agency - the National Poverty Eradication Programme (NAPEP). Some of the more successful women have accessed multiple sources of credit over the years as their businesses have expanded. None of the participants has accessed loans from any of the commercial banks which have established microfinance banks/departments operating in the study area.