Micro Financing and Life in Rural Nigeria: Evidence from Edo North and Central of Nigeria

Abstract

This study examines the impact of micro financing on life in the rural areas using Edo North and Central Regions of Nigeria as a case study. The objective of the study is to examine the impact of micro financing on poverty alleviation, unemployment, living standards and small and medium enterprises growth. A structured questionnaire was used to collect data and the collected data were analyzed using the maximum likelihood estimation (MLE) technique of the ordered logistic regression. The results of the analysis show that micro financing in the region has a significant positive effect on poverty alleviation; and small medium enterprises growth; a negative and significant effect on unemployment and a negative but insignificant effect on poor living standards. The study recommends that: governments should continue to encourage micro financing institutions through more tax incentives so that their capacity to reduce poverty and able to contribute meaningfully to the achievement of the Sustainable Development Goals (SDGs) of reducing poverty can be enhanced; to foster employment generation by small and medium enterprises, governments should look for ways to encourage SMEs by channeling more financial assistance through microfinancing institutions to them with more liberal terms; governments and financing institutions should mainstream on providing more technical assistance to SMEs to enhance their ability to better living standards; to boost growth among SMEs, the firms should also look closely at financing growth through internal sources such as retained earnings.