Micro-financing and rural poverty reduction: A case of Rima Microfinance Bank in Goronyo Local Government Area, Sokoto State, Nigeria

Abstract

Microfinance is proposed to be an efficient and viable means to poverty alleviation in the developing world, but there has been little empirical study on the impacts of microfinance banks. This study examines the impact of Rima Microfinance Bank on beneficiaries' income and poverty in Goronyo Local Government Area of Sokoto State, Nigeria. A multistage-sampling technique was used to draw the sample and a structured questionnaire was used for data collection. The data was analysed using descriptive statistics (means, frequency, and percentages) and Foster, Greer and Thorbecke (FGT) poverty index. The result revealed that the beneficiaries had a mean per capita income of N47,489.19 before and N115,678 after using the Rima Microfinance credit facility. The result of the FGT poverty incidence reduces by 6%. This is reflected by the reduction in poverty depth and severity significantly after the Rima microfinance intervention in the form of agricultural input credit facilities. The study recommends a microfinance policy that will ease more access to credit as well as ensuring efficient utilization of acquired inputs through effective monitoring for better productivity, income and poverty reduction among rural dwellers.