Micro-Credit Impact on Poverty Alleviation in North-Eastern Nigeria: Study of Yola South Local Government Council

Abstract

Purpose – To empirically examine the impact of microcredit on poverty alleviation in North Eastern Nigeria, with a special focused on the Yola South Local Government Area, the microfinance banks relationship with rural households, access to microcredits and challenges, depth of poverty, perceived benefits of microfinance on small and medium scale enterprises and rural households.

Design/Methodology/Approach: To achieve the purpose of this research, primary data was collected using questionnaires and interviews conducted among some selected rural households and microfinance banks customers in Yola South Local Government Area, to evaluate their access to microcredit; incidence and severity of poverty among the rural households selected for this study. To achieve this, we collected primary data using questionnaires and personal one on one interviews. We employed appropriate descriptive statistical and analytical tools to process the data collected.

Findings -  The result obtained from the study shows that the level of poverty among the rural people in the North Eastern Nigeria is still high; however, it was found that those that have access to microcredit facilities granted by the Microfinance banks seems to have done better economically than those who without access to microcredit. Put in another way, access to credit facilities offered by the microfinance banks has a positive but not necessarily a significant impact on poverty reduction among the rural poor population.

Research limitations/implications: It was found that most of the respondents interviewed had no form of formal education and could not reasonably respond to some of the questions asked by the interviewer, even when the questions were translated to their local language. The findings of this research to some extent are limited by these insufficient responses provided by the respondents. Hopefully this will be addressed through additional research on appropriate language translation methods in future research.