This paper attempts to provide a critical appraisal of the debate on the<br />effectiveness of microfinance as an effective tool for eradicating<br />poverty. It argues that while microfinance has developed some innovative<br />management and business strategies, its impact on poverty reduction<br />remains in doubt. Micro finance impact on poverty reduction in Imo state<br />was studied by a stratified sampling method in the selection of the<br />customers. The study area was divided into 16 sample units based on the<br />various local government areas in Imo state. Four (4) MFBs were<br />purposefully selected from each of the 3 Senatorial Zones, making a<br />total of 12 MFBs. In order to have unbiased selection of samples, Three<br />Hundred and eighty two questionnaires (382) were randomly distributed to<br />customers of these selected microfinance Banks in the three senatorial<br />Zones as follows, namely: Owerri (82), Okigwe (100) and Orlu (200). The<br />result revealed that majority of respondents were male constituting<br />about 78% while women 22% and majority of the respondents were married<br />(65%), single (33%) divorced (2%). 137 of the respondents do not have<br />any formal education, 67 possess primary school leaving certificate. 81<br />indicated having secondary school certificate. 71 with diploma / NCE and<br />its equivalent. 28 of them have first degree certificate and above<br />representing 36%, 17%, 21%, 19% and 7% respectively. The monthly<br />income brackets of the respondents show that One hundred and eleven<br />(111) respondents (29%) indicated earning (sic)10,000 - (sic)15,000, 95<br />respondents or 25% indicated (sic)15,001 - (sic)20,000 as their income<br />bracket, 94 or 24% were earning above (sic)20,000, while 84 (22%)<br />indicated earning below (sic)10,000. From the result, high income class<br />has more capacity to save than poor dwelling in rural areas. The finding<br />appears to support the predication of Economics theory of savings which<br />argues that saving is a function of the level of income. The implication<br />of this study is that the federal government of Nigeria and financial<br />institutions in the country should take up the challenge of establishing<br />bank branches in the rural areas or make formidable arrangement for<br />supplying more credit to the rural dwellers.
Ihugba, O. A., Bankong, B., & Ebomuche, N. C. (2015). The Impact of Nigeria Microfinance Banks on Poverty Reduction: Imo State Experience. International Letters of Social and Humanistic Sciences, 16, 92–113. https://doi.org/10.18052/www.scipress.com/ilshs.16.92