The purpose of this study is to identify the
contribution of microfinance bank to the economic wellbeing of rural dweller
using Alheri Microfinance Bank Limited as a case study. The establishment of
the Micro-finance bank with their peculiar characteristics that enables their
customers to make the savings and to obtain loan with little or no collateral
is a booster to the scarcity of funds for investment among the poor, especially
in the rural area. In strict sense, the micro-finance banks are not banks at all,
since their operations are abbreviations to what is obtained in convectional
banks, as regards rules and regulations guiding banks, their duties in general
and their profit orientation altitude. The role of micro-finance banks in
Nigeria to the rural dwellers is nothing to write home about and those who
intend to set up micro-finance banking business in future. In addition, the
findings from this research study shows that microfinance banks have not
identified themselves adequately with rural dwellers, cooperative societies and
export financing to transform in the Nigeria economy into meaningful
development this area should not be neglected to commercial banks and
traditional money lenders in terms of financing and investments.
TABLE OF CONTENT
Title page i
Table of Content v-vi
to the Study 1-2
of the Study 2-3
of the Problem 3
of Research Hypothesis 3-4
of the Study 4
of the Study 4
of Terms 4-5
of Accounts of Alheri Microfinance Bank 6-8
for Establishing Micro Finance Bank 9
Finance Banks and Local Economic Development 9-10
of Micro-Finance Banking System 10-12
of the Study 13
Size and Procedure 13-14
of Data Collection 14
of Data Collection 14
of Hypothesis 15
and Interpretation of Data 17
and Analysis of Data Using Research Questions 17-20
and Analysis of Data According to Hypothesis 20-21
Conclusion and Recommendation 23
5.1 Summary 23
5.2 Conclusion 23
5.3 Recommendation 24
for Further Studies 24
1.1 Background to the Study
federal government of Nigeria in the 1990 budget speech decided to establish
micro-finance in order to stretch its programme of grass-roots economic
development. The aim of this study is to make a research on the contribution of
microfinance banks to the economic well being of rural dwellers in Nigeria.
micro-finance bank scheme which has started years ago received recognition as
social economic venture designed to address poverty and aimed at motivating and
encouraging the rural dwellers to improve their standard of living through
proper use and management of resources generated in their communities.
microfinance bank was the first micro–finance bank in Kaduna State. The project
took off in the country with a mandate from the presidency to improve the lost
of people through credit facilities devoid of conventional banking bottle necks
and its operating capital boss supplied by unfired community.
This community provides the building
for the operation and the management staff a well ass the board and the trustee.
The idea is that when such collective money is given out as loans, there won’t
be much difficult in recovering it back as at when due.
Micro finance bank has
evolved as an economic development approach intended to benefit low income
women and men in the rural areas. The term refers to the provision of financial
services to low – income earners, including the self – employed. Financial
services generally include savings and credit; however, some microfinance organizations
also provide insurance and payment service.
Microfinance banking is
not simply banking, it is a development tool.
Micro finance activities
loans, typically for working capital.
appraisal of borrowers and investments.
substitutes, such as group guarantees or compulsory savings.
to repeat and longer loans, based on repayment performance
loan disbursement and monitoring
Although some Microfinance
banks provide enterprise development services, such as skills training and
health care, these are not generally included in the definition of micro
Microfinance banks can be
non governmental organizations savings and loan cooperation’s, credit unions,
government banks, commercial banks, or non bank financial institutions. Micro
finance bank clients are typically self employed low income entrepreneurs in
both urban and rural areas. Clients are often traders, street vendors, small
farmers, service providers (hairdressers, rickshaw drivers) and artisans and
small procedures, such as blacksmiths and seamstress. Usually their activities
provide a stable source of income (often from more than one activity). Although
they are poor, they are generally not considered to be the poorest of the poor.
Money lenders and
relating savings and credit associations are informal microfinance providers
and important sources of financial intermediation.
1.2 Objectives of the Study
general objective of this study is to determine the contribution of
microfinance bank to the economic wellbeing of rural dwellers:
reveal the contribution of micro-finance banks on rural dwellers and benefit of
Alheri microfinance Bank Limited, Kaduna to the people of Kaduna and its entire
determine the extent to which accessibility to micro credit has increased the
household income of rural dwellers in Kaduna metropolis.
examine the contribution of micro finance bank on asset acquisition and saving
of rural dwellers in Kaduna.
1.3 Statement of the
The major problem
necessitating this study arose from the Central Bank of Nigeria’s laws,
regulation, supervision and central placed over the activities of micro finance
banks which are:
relive the micro finance and every micro finance bank is accepted with respect
to their proper books of account and it must be submitted to the National Board
not later than 28 days.
problem can be seen in its books and affairs because it is a fully fledged
banks, it books and affairs are subject to continuous examinations by Central
Bank working through natural board for micro finance banks.
not later than four months after the end of its financial year, each micro
finance bank must submit to the National Board and exhibit prominently to the
view of all members of the micro finance banks balance sheet and profit and
1.4 Statement of Research
The following hypotheses serve
as a basis of the questions to be answered for the study.
Ho: There is a significant
relationship between micro-finance bank and the economic development of rural
H1: There is no
significant relationship between micro-finance bank and the economic
development of rural of dweller.
1.5 Scope of the Study
With available data on microfinance
banking on rural dweller, the case study will focus its attention on the
management system of Alheri Microfinance Bank Limited, Kaduna and suggest wages
by which the micro-finance banking system can be improved.
of the Study
This research work shall be
limited to the contribution of micro-finance banks to the economic wellbeing of
rural dwellers. The following are the limitation that hinders the study of this
Financial Constraints: There are not enough funds to fuel
the study of this research work. The researcher has access to a very little
source of fund.
Time Constraints: Due to the limited time available
to carry out this research work, it is not possible to carry out the research
extensively as anticipated by the researcher.
1.7 Definition of Terms
A type of banking service that is provided to
unemployed or low-income individuals or groups who would
otherwise have no other means of gaining financial services. Ultimately, the
goal of microfinance is to give low income people an opportunity to become
self-sufficient by providing a means of saving money, borrowing money and
financial establishment that invests money deposited by customers, pays it out
when required, makes loans at interest, and exchanges.
means a characteristic of the countryside rather than the town.
Contribution: This refers to the something that
is given in order to help achieve or provide something.
Rural Dwellers: These are people living in rural
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