MICROFINANCE AND ECONOMIC EMPOWERMENT OF WOMEN IN LAGOS STATE NIGERIA


Content

ABSTRACT

This study examines the impact of microfinance on economic, financial and social empowerment of women micro entrepreneurs in Ikeja, Lagos State. A sample of 50 women micro entrepreneurs were selected in Ikeja some of which include traders, hairdressers, fashion designers, fish farmers and boutique owners. Survey method was employed to obtain a picture of the population. Research data was collected using a 24 item questionnaire in order to measure the empowerment of women micro entrepreneurs and access to capital from microfinance banks. Reliability and validity of the instrument was tested to ensure the instrument has face and content validity. Data collected were analyzed using descriptive and inferential statistics. Research questions were tested using frequency counts and percentages while the hypotheses were tested using correlation coefficient, analysis of variance and regression analysis. The result of my analysis showed that; there are more women micro entrepreneurs between the ages of 18-45, 68% of the respondents were married, half of the population engaged in trading, 24% were hairdressers and fashion designers constituted 8%. The finding shows that women micro entrepreneurs can be economically empowered and there is an existing appreciable level of economic empowerment; 14% of respondents have purchased lands, 4% were able to build houses, 68% are sponsoring their children's education. It was proved that loan facilities, trainings and monitoring through microfinance can improve women's business capacity in various ways like buying more goods, buying in bulks, increasing stocks and buying more work tools. There is a positive relationship between the access to capital through Microfinance and the empowerment of women micro entrepreneurs, there is a significant difference in access to capital based on business types. Age and marital status of women combined gave 4% variation in economic empowerment of respondents. Based on these findings we recommend that Women Micro entrepreneurs should embrace the services of microfinance and seek information about the product/service that will help in empowering them and should use the resources appropriately. Microfinance banks should ensure they increase their efforts/strategies to reach all women micro entrepreneurs, develop packages suitable for each type of business and personality. More adequate follow up and training/monitoring should be provided for women micro entrepreneurs and microfinance should create a warm and welcoming environment in their offices to win the women and also use friendly approaches.

 

Basically, non-parametric statistical tests and analysis were called out.  For clarity purpose results of data analysis were presented using statistical table percentages, charts and chi-square. Of the 100 questionnaire administered, 82 were retrieved duly completed.  These were analyzed to elicit answers to the research questions.  The questionnaires retrieved represented 71.6% retrieval rate.


 

TABLE OF CONTENTS

CONTENT

Front Page                                                                                                   i

Title Page                                                                                                      ii

Certification                                                                                                 iii

Dedication                                                                                                    iv

Acknowledgement                                                                                    v

Abstract                                                                                                        vii

Content                                                                                                         ix

 

CHAPTER ONE: INTRODUCTION

1.1      Background of the Study                                                             1

1.1.1  Differences between Microfinance and Microcredit           2

1.1.2 Gender Difference                                                                         5

1.1.3  The Nigerian Microfinance                                                          7

1.2      Statement of Problem                                                                  16

1.2.1 Purpose of study                                                                            16

1.2.2 Objectives of Study                                                                       16

1.2.3 Significance of Study                                                                     17

1.2.4 Scope of Study                                                                                17

1.3      Research Questions & Hypothesis                                             18

 

CHAPTER TWO: LITERATURE REVIEW

2.1      Microfinance                                                                                   19

2.1.1  The History of Microfinance                                                       20

2.2      Providers And Models of Microfinance Inventions              22

2.2.1  Rotating Savings and Credit Associations                                23

2.2.2  The Grameen Solidarity Group Model                                                 24

2.2.3 Village Banking Models                                                                24

2.3      Microfinance and Its Impact on Development                      25

2.3.1 The Impact of Microfinance on Poverty                                  29

2.3.2 Empowering Women                                                                    29

2.3.3 Reaching the Poor                                                                         33

2.4      Financial Sustainability versus Serving the Poor                   34

2.5      Women Empowerment As Development Vehicle                38

2.5.1 UNFPA                                                                                               40

2.5.2 CGAP                                                                                                 40

2.5.3  Fostering Financial Stability                                                        41

2.5.4 Microfinance in Tanzania                                                            45

2.5.5 Microfinance in US                                                                        45

 

CHAPTER THREE: RESEARCH METHOD

3.0      Introduction                                                                                    56

3.1      Methodologies Used In Other Empirical Studies on

Microfinance                                                                                   60

3.2      Data Analysis: Qualitative and Quantitative Analysis           64

3.3      Impact assessment of Microfinance                                         67

3.4      Methodology Used for this Research study                            69

 

 

CHAPTER FOUR: DISCUSSION OF FINDINGS/SIMPLIFICATION

4.1      Descriptive Analysis of Variables                                               73

4.2      Research Questions                                                                       76

4.3      Testing Of Hypotheses                                                                  78

4.4      Summary of Results                                                                      82

 

CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION

5.1      Summary                                                                                          84

5.2      Conclusion                                                                                       90

5.3      Recommendation & Suggestion                                                91

References                                                                                       94

Appendix                                                                                          101

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

 

1.1      Background of the Study

Microfinance refers to the provision of financial services to low-income clients, including the self-employed. The term also refers to the practice of sustainably delivering those services. More broadly, it refers to a movement that envisions "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers". Microfinance encompasses any financial service used by poor people, including those they access to in the informal economy, such as loans from a village moneylender. In practice however, the term is usually only used to refer to institutions and enterprises whose goals include both profitability and reducing the poverty of their clients.

 

Micro financial services are needed everywhere, including the developed world. However, in developed economies intense competition within the financial sector, combined with a diverse mix of different types of financial institutions with different missions, ensures that most people have access to some financial services. Efforts to transfer microfinance innovations such as solidarity lending from developing countries to developed ones have met with little success.

 

Microfinance can also be distinguished from charity. It is better to provide grants to families who are destitute, or so poor they are unlikely to be able to generate the cash flow required to repay a loan. This situation can occur for example, in war zone or microfinance means providing very poor families with very small loans (microcredit) to help them engage in productive activities or grow their tiny businesses. Over time, microfinance has come to include a broader range of services (credit, savings, insurance, etc.) as we have come to realize that the poor and the very poor who lack access to traditional formal financial institutions require a variety of financial products.


 

1.1.1    DIFFERENCES BETWEEN MICROFINANCE AND MICROCREDIT

Microcredit came to prominence in the 1980s, although early experiments date back 30 years in Bangladesh, Brazil and a few other countries. The important difference of microcredit was that it avoided the pitfalls of an earlier generation of targeted development lending, by insisting on repayment, by charging interest rates that could cover the costs of credit delivery, and by focusing on client groups whose alternative source of credit was the informal sector. Emphasis shifted from rapid disbursement of subsidized loans to prop up targeted sectors towards the building up of local, sustainable institutions to serve the poor. Microcredit has largely been a private (non-profit) sector initiative that avoided becoming overtly political, and as a consequence, has outperformed virtually all other forms of development lending.

 

Traditionally, microfinance was focused on providing a very standardized credit product. The poor, just like anyone else, need a diverse range of financial instruments to be able to build assets, stabilize consumption and protect themselves against risks. Thus, we see a broadening of the concept of microfinance--our current challenge is to find efficient and reliable ways of providing a richer menu of microfinance products after a natural disaster.

 

Microfinance refers to loans, savings, insurance, transfer services and other financial products targeted at low-income clients. Microcredit refers to a small loan to a client made by a bank or other institution. Microcredit can be offered, often without collateral, to an individual or through group lending.

 

Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor.


 

Microcredit is a financial innovation which originated in Bangladesh where it has successfully enabled extremely impoverished people to engage in self-employment projects that allow them to generate an income and, in many cases, begin to build wealth and exit poverty. Due to the success of microcredit, many in the traditional banking industry have begun to realize that these microcredit borrowers should more correctly be categorized as pre­-bankable; thus, microcredit is increasingly gaining credibility in the mainstream finance industry and many traditional large finance organizations are contemplating microcredit projects as a source of future growth. Although almost everyone in larger development organizations discounted the likelihood of success of microcredit when it was begun in its modern incarnation as pilot projects with ACCION and Muhammad Yunus in the mid- 1970s, the United Nations declared 2005 the International Year of Microcredit.

 

ENTREPRENEUR

An entrepreneur is a person who has possession over a new company, enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome. The term is a loanword from French and was first defined by the Irish economist Richard Cantillon. A female entrepreneur is sometimes known as an entrepreneuse. However, with the word "entrepreneuse" being the French feminine form of entrepreneur, its usage in English in delineating sexes detracts from the meaning of the word "entrepreneur". Entrepreneur in English is a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome.

 

MICRO-ENTREPRENEUR

Micro entrepreneurs are the owners of small businesses that have fewer than five employees. Examples of micro entrepreneurs are owners of bakeries, beauty parlours, child care facilities, repair shops, arts and crafts shops, painting businesses, contracting businesses, family-owned shops, auto body shops, small-scale restaurants, and small-inventory trading businesses.


 

1.1.2  GENDER DIFFERENCE

This is a distinction of biological and/or physiological characteristics typically associated with either males or females of a species in general. In the study of humans, socio-political issues arise in classifying whether a sex difference results from the biology of gender. This article focuses on quantitative differences which are based on a gradient and involve different averages. For example, men are taller than women on average, but an individual woman may be taller than an individual man.

 

INTERGENERA TIONAL GENDER GAPS

The differences in the work patterns of men and women, and the 'invisibility' of work that is not included in national accounts, lead to lower entitlements to women than to men. Women's lower access to resources and the lack of attention to gender in macroeconomic policy adds to the inequity, which, in turn, perpetuates gender gaps. For example, when girls reach adolescence they are typically expected to spend more time in household activities, while boys spend more time on farm or wage work. By the time girls and boys become adults, females generally work longer hours than males, have less experience in the labour force, earn less income and have less leisure, recreation or rest time.

This has implications for investments in the next generation. If parents view daughters as less likely to take paid work or earn market wages, they may be less inclined to invest in their education, women's fastest route out of poverty.

WOMEN AND ECONOMIC EMPOWERMENT

Pioneering microfinance institutions (MFls) have already recognized that the twin goals of empowering women and developing poor communities are closely connected. The Nobel Prize-winning Grameen Bank, for example, gives around 96 percent of its micro-loans to women, while the UN estimates that around 76 percent of all microfinance clients globally are women.

 

"There are two different ways to look at this: one is that microfinance is good for women; the other is that women are good for microfinance," says Susy Cheston of Opportunity International, a US-based organization that gives around 86 percent of its micro-credit loans to women. "There are lots of different reasons that people lend to women. For some, it's about having customers that are very credit-worthy and bring better value to the institution

 

WOMEN EMPOWERMENT AS DEVELOPMENT VEHICLE

Wise business or household investments can increase a woman's status in communities where women otherwise seldom assume the role of owner, employer or decision-maker. Financial empowerment has, in many cases, helped women acquire more self-esteem, more respect within their families, and has even linked to decreases in domestic violence. Empowered women also have a positive impact on their communities, and are considered to be more responsive to the long-term needs of their households than men.

 

WOMEN'S WORK AND ECONOMIC EMPOWERMENT

In subsistence economies, women spend much of the day performing tasks to maintain the household, such as carrying water and collecting fuel wood. In many countries women are also responsible for agricultural production and market work. Often they take on paid work or entrepreneurial enterprises as well. Unpaid domestic work - from food preparation to caregiving - directly affects the health and overall wellbeing and quality of life of children and other household members. The need for women's unpaid labour often increases with economic shocks, such as those associated with the HIV/AIDS pandemic or economic restructuring. Yet women's voices and lived experiences - whether as workers (paid and unpaid), citizens, or consumers ­are still largely missing from debates on finance and development. Poor women do more unpaid work, work longer hours and may accept degrading working conditions during times of crisis, just to ensure that their families survive.

 

1.1.3  THE NIGERIAN MICROFINANCE

There have been different operators in the Microfinance Industry in Nigeria; NGO- MFI, Community Banks, Microfinance Banks, Development Financial Institutions, Informal Financial Institutions/Cooperative Societies. There are numerous financial and semi- financial institutions during the past centuries. Nigerian Government used different means to boost financial services for the MSME market, despite modest success during the 1960s and the 1970s another initiative was launched, thus we have the introduction of the community bank, Community banks were licensed in 1992 and supervised by the CBN, who also made some changes in the community bank regulatory framework. In 2000 Community bank were recognised not be functional and achieving it purpose. Therefore in 2005 the new Microfinance policy was implemented, it replaces the Community bank scheme and it requires that; all Community Banks would have transformed to Microfinance banks by 31st Dec 2007.

 

NGO-MFI

§  1st NGO to provide Microcredit was registered from the early 1980's

§  Few operators have reached a considerable scale: COWAN, FADU, LAPO and DEC

§  Loan portfolio are insignificants in absolute value

§  Low average loan amount i.e., provide loan to the poorest

§  Enable to develop the MSME customers on a long term

§  Most NGOs provide loan to women

§  Grameen based group lending methodology

 

Community Banks

§  In Jan 2007, 750 Community Banks were listed & located in rural areas

§  All Community Banks were transformed in MFB by 31/1212007

§  In Jan 2007,300 were transformed and 100 in process

§  Not all of them will fulfil capital requirements of: -

N 20 million/branch for a unit license

N 1 billion for a state license

§  In the year 2003, 57% of the Community Bank's portfolio were in arrears.

§  A large part of lending activity is for salary individuals

 

Microfinance Banks

§  Introduced at the end of 2005

§  In Jan 2007,37 fully licensed MFBs of which 15 are in Lagos

§  In general most MFBs have more deposit than lending clients

§  MFBs are still experimenting both: Individual and group models


 

Microfinance Banks: Products ranges and conditions

Loans

The MFI use the Grameen model of small groups of 10 in contrast to NGO large group

Payback- 30 - 90 days maturity (which vary a times), payment can be made daily or weekly

 

Credit Collateral used by Microfinance Banks

Due to low degree of registered fixed assets of the target, MFB use alternative sources; Chattel, Inventory, Postdated cheques, shares and Guarantor

 

Debt Recovery Agent

There are times when Microfinance banks have to engage the services of agents to recover loans from customers who are unwilling to pay and these agents charge the bank a certain percentage of the loan.

 

In Lagos State the Governor has inaugurated Board of Trustees for the State Micro Finance Institutions, this was done on Monday 12th May 2008 with the aim of building a new Lagos, creating jobs, encourage entrepreneurial mentality, reduce poverty level and raise the standard of living of the people. The board is to provide corporate governance and manage the Lagos State Microfinance fund, attract people oriented development projects, implement and coordinate Microfinance programme.

MFB

CUSTOMER SERVICE

PRODUCTS AVAILABLE

OTHER PACKAGES

LOCATION

Olive MFB

 

Prompt attention

The usual savings and current account, Olive Fast Pay which is a loan programme with interest rate of 5-6%, Olive Shares acquisition package, Olive save and Grow for Children, Olive LPO, Agric Account for farmers, Olive Help for Higher Education Learning Plan, and a savings account that attract 7% annual interest.

Interest charged is 5% -6% lending rate.

Savings account is &% annual interest Corresponding Banks. Diamond bank and Bank PHB Have a relationship of 6 weeks to enjoy a loan facility

-Good branding

-Bank's vision and mission boldly written

Enjoy ATM se4rvices Cheques don't go for clearing.

No maintenance charges

-Staff come for regular collection

-Branches at Mile 12, Agege and Ikorodu. Very comfortable interior or could compete with commercial banks

Awolowo way, Ikeja

Infinity Microfinance Bank

Gave brochure that has detailed analysis of all the banks products

 

Saving accounts N500 ­weekly contributions. Entitled to loan after 30days of consistent contribution Prepayment over a period of 30 days

LPO financing - need not be an account holders, interest and charges negotiable.

Current account - Basic requirements, Cheques goes for clearing

 

MILE 12

Citi serve

Good customer care. Staff willing to talk about products and services. Vast knowledge about bank products Flyers available for further information.

 

Savings -open with 1 k and minimum balance 1 k interest is 5%PA. Short term loan is available on the savings a/c. interest charged is 5% monthly.

Current a/c-open with 5k minimum balance zero. Overdraft facility is available with an interest of 5% Cheque book cost N2000. COT of N5/mill concession of N2/mill for a turnover of N4m monthly.

Kakaaki a/c- hybrid between current and savings account. Zero COT. Loan max N 1 OOk for a period of 3mth. Share certificates for collateral. Open with 10k to obtain loan, 4% regular fee is charged. It comprises 1 %-mgt fee, 1 % legal fee 1 % process fee. Then 5% interest is charged on the loan obtained.

Bank employees go around to customers for daily collection.

Fixed deposit is available and negotiable based on the amount and duration. Correspondent bank is Access bank and GTB. Salary relief - this is a salary account that enables the beneficiary enjoy up to a maximum of 50% of his 3 months’ salary which can be repaid in 3months.

Quick -quick--: this is a salary advance that enables the beneficiary enjoy up to a maximum of his monthly salary which must be repaid back within 30- 90 days. Freedom One a/c: this savings alc enables customers to the opportunity to save and meet specific future needs within a flexible tenor. It is a high interest yielding account for people who are saving to start up their businesses.

SERVICES: Group Deposits, Group Savings, Group loans, Overdrafts, financial Advisory, SME Financing, Mobile ISMS Banking, Fund Transfer, Payroll/pension.

They have eight branches.

Maryland, Ikeja

KFC Microfinance bank

Flyers available for further information and bank profile were written on the flyers

Current a/c - open with 3k, minimum bal 5k. COT is N2.5 I mill to obtain a loan facility must have relationship with them for 3mths.

Other core products include: Savings (individual corporate) Current Accounts (individual corporate) Premium savings account Investment project multiplier.

Affiliates include: staco insurance, 1st Guarantee pension, LASACO assurance

Maryland, Ikeja

Kings Microfinance Bank Limited

No handbill, got verbal information

Savings A/C- opening No flyers Oba balance 2k, with 5 %per available Akran, annum including a minimum Ikeja balance of 2k King's target account - For festivity which money is deposited and interest is paid at 5% annually Children's account - meant for children's welfare and can be renewed for 2 or 3 years with an annual interest rate of 5%

Current Alc - opening balance of 5k with zero minimum balance possibility. COT is N5 per every 1 k withdrawal

Project account which is based on sponsoring large projects

Corporate account which is run by formal organization

Salary Account where standing order is given to pay salaries to some listed

groups of people

No flyers available

Oba Akran, Ikeja.

MIC Microfinance Ltd.

 

 

NO

Allen Avenue, Ikeja.

Imperial Microfinance Bank

 

Savings – normal type and the daily contribution type

 

 

Lift Above Poverty Organization (Lapo) MFB

Good attention from customer care.

Bank products are strictly No Mile 12 for women. The women are grouped into a minimum of 8. They are trained for a period of 6wks on how well to utilize the loan that will be given to them. Each member of the group signs an undertaking that they would be held responsible if any member of the group defaults in the repayment of the loan that will be given. Thus no need for collateral. The first stage a loan of N20k will be given to the women. The maximum loan for the product is 150k. It is repaid over a period of 8 months with an interest rate of 3% monthly. Each stage of the loan is incremental by

10k. 10% of the loan is deposited by the benefactor. It can be withdrawn by the benefactor at any time. At stage of the loan, an individual qualifies for another product called micro investment scheme. The first stage of the loan is 50k. It is incremental by 30k. 3% interest is charged monthly for a period of 8 months.

NO

Mile 12

Money Wise MFB

Information got based on questions asked. Flyers were available for further information

Savings alc - open with 1 k, Flyers were Olowu minimum bal N500. Interest available for Ikeja rate is 4% PA current open with 5k to get a loan facility. 50% of the loan for collateral. interest on loan is 4% monthly

Flyers were available for further information.

Olowu Ikeja

IMFB

Staff explained & flyers were available

Roster a/c ­OPERATIONS- Open with an amount e.g. 1 k, after 10days triple the amount saved is given out as a loan. And 1 k is deducted as maintenance charge at the end of the month.

Bulk counting room

Interest on savings account is 6% Per annum

Charge on Current account is N5/mil and VAT. Loan is 6%-8% monthly.

All accounts have loan facility available.

Products include:

IMFB dreams savings a/c - minimum regular savings of 3k or N100 per day. Interest rate is 2% above the normal rate if no withdrawal in one year.

Can be used as collateral for loans.

My pocket savings a/c:

Interest rate is 6% PA. Withdrawal period is predetermined by the client, subject to a minimum of one month. The client can make contribution on a monthly, weekly or daily basis.

IMFB beneficiary trust ale: this product is meant for parents or guardians to save towards the future of their children opening balance of 1 k. Minimum tenor of 2-5yrs. Interest at call deposit rate.

Insurance cover of up to 200% of the balance on the alc in the event of accident or in the event of accident permanent disability of parent or guardian.

IMFB greater tomorrow alc IMFB "MDC" modified daily contribution a/c: save for thirty days and get one additional one days contribution for saving for 30days to qualify, minimum tenor withdrawal is 6months and no interest would be added in the month of withdrawal.

Generic Savings account: clients set the rules themselves. Interest is 5% PA. It is available to individuals, groups, associations and unions. Minimum opening balance is N500. Minimum account balance is N500. Any withdrawal of more than 4 times a month will attract 0.5% flat service charge in addition to losing the interest.

Hybrid Savings a/c: This type of account allows for payment of cheques and dividend warrants with the following features; opening balance for Individual is 5k and for enterprise is 10k and the minimum balance for individual is 2k and for enterprise is 5k. No charge is made on this account. IMFB timber Savings a/c: This is a type of fixed deposit account to secure a stable future and the account is run by placing at least 10k and a minimum of 30days.

Gold a/c: The aim of this type of alc is to assist high income earners concentrate on their business while effecting banking transactions on behalf of them. This is with an opening and minimum balance of 50k for individual and 100k for corporate Current a/c: This is the normal current account type with a minimum opening balance of 5k for individual and 10k for enterprise.

My shares savings a/c: this give customers right to own shares by saving 50% of the required amount and saving 50%

IMFB 'I DEY LEARN' school everywhere (Capacity building program): here is a type of social responsibility programme designed to contribute to millennium development goals

Loan products:

IMFB ride: This is created for on to buy bicycles, tricycles, motorcycles, cars and buses for personal or business use.

LPO financing: Funding LPO and reputable organizations.

Cheque exchange: bridging short term 90 days cash need of those in full time employments of reputable organizations.

Trading, working and asset loans: Available as short term working capital for those in micro businesses IMFB easy life: A kind of products provision with future install mental payments

IMFB Rosca a/c: This allows groups to save 33% and borrow 100% for working capital subject to a maximum of 200k. Interest is charged at the normal lending rate.

 

Adeniyi Jones, Ikeja.

Ipodo MFB

Prompt attention, vast knowledge about bank products, willing to talk about products. No other branch. Interior is not conducive. Staffs were not properly dressed. & were eating on duty.

Enterprise current A/c: Form C06, open with N2k, min bal N500. No maintenance charge, loan facility is available 5% interest on loan

Regular current a/c: Basic requirements. Correspondent bank is oceanic.

Daily contribution is available i. e. staff go about to get deposits from clients. Corporate Alc: for corporate body 6% interest on loan. Open with 3k. Open with form COT and basic requirements. Including passport photographs of signatories to the a/c .. Finance LPO

Fixed Deposit: Open with minimum of 50k interest rate is 8%PA. It is calculated 8%/12* 30/365. Less 10% WHT. It is also negotiable based on duration and value. Minimum balance for all alc is N500.

Have a relationship of 2- 3months before access to a loan facility.

Interior is not conducive. Staffs were not properly dressed. E.g. eating on duty.

 

Awolowo way, Ikeja

 

Berach ach MFB

Flyers available

Current a/c: open with 5k Salary a/c.

Regular Savings a\c: open with 1 k, minimum daily contribution of N200. Interest rate is 6% PA Target savings a/c: for meeting children school fee, land or household acquisition.

Initial deposit of N1000 minimum daily contribution of N100, minimum monthly contribution of N3000

Daily savings a/c. This is the mode of Esusu. Client determine mode of daily contribution. Minimum tenor is 30days. After 3 months, opportunity to save for10days and obtain loan for 30days saving amount.

Corporate alc open with 10k fixed deposit: minimum 100k, 6% interest rate.

Loan products:

Business expansion/improvement loan:

This is aimed at the micro to small business customers the purpose of the product is to provide small and medium term finances for the purpose of stock. 25% contribution from the customer is required. Maximum tenor 1yr.

LPO financing: clients enjoy bank support in financing orders from reputable org.

Berachach carry go: buy your bicycles, motorcycles, buses and cars for business and personal use.

Working capital finance

 

CMD Road







                  

1.1.4 Table showing some of the Microfinance banks in Nigeria, products, customer service package.

Key

K= Thousand

P.A = per annum

N5 per Mille = N5 per N1000

1.2      STATEMENT OF PROBLEM

Is Microfinance a means to economically empower women Micro- entrepreneur? Most women Micro- entrepreneur are still living below the poverty level and does not even earn enough to feed and take care of themselves and their family, This study is to actually look for way forward  in helping Women Micro-entrepreneur, in making them become stable financially, improve their businesses and expand and also be viable. The study is show if Micro finance can achieve this or if it has already made a success out of the Women- Micro-entrepreneur.

 

1.2.1  PURPOSE OF STUDY

It has shown from studies that the purpose of Microfinance is to alleviate the suffering of the poor and the less privileged ones, and overtime there has been an imbalance in the financial capability of Women versus men in most countries and even Nigeria is not left out, This study is designed to determine how or if Microfinance has actually helped empowered Women economically i.e. has contributed to the financial/monetary (growth) achievement and status i.e. social status of women & if Women are actually benefiting from the new Microfinance Revolution in Lagos.

 

1.2.2 OBJECTIVES OF STUDY

To find out the following:

1.     What services/products Microfinance Offers?

2.     How accessible the products/services are to women micro entrepreneurs

3.     The impact Microfinance has made in empowering women micro entrepreneurs.

4.     The various business types of the women micro entrepreneurs

5.     The level of awareness of women micro entrepreneurs about the services of MFI

6.     The incomes, business capacity and how they are doing economically

7.     If they have easy access to loan and if there is a difference in accessibility based on age, business type and marital status.

 

1.2.3  SIGNIFICANCE OF STUDY

This study is to help discover if there is need for more work to be done to economically empower women, though a lot of programmes have been put in place by the government in the public sector and still majority are not benefiting from it, so coupled with the private sector initiative of Micro financing individuals who are interested and ready to be empowered, there should be a positive result or progression. Also in the course of this study awareness is being made about the existence of Microfinance and the general services being rendered; insurance, microcredit, deposit etc and women are re­oriented about the fact that Microfinance is real and out to help them while meeting their objectives of profit as well (i.e. everybody is out to take advantage of them or their ignorance.

 

1.2.4  SCOPE OF STUDY

The study covers Lagos state and is narrowed down to Ikeja LGA of Lagos. The Women Micro-entrepreneur being considered are Traders, Hairdressers and Fashion Designers. These are people with small capital base. Microfinance banks are mostly located in Ikeja so the population of people in Ikeja are aware of the existence and services of Microfinance Bank unlike in other part of Lagos State. Ikeja is wide part of Lagos State which is inhabited by various social classes of people; low class, middle class, high class etc.

 

1.3     RESEARCH QUESTIONS

1.               Can Women Micro entrepreneur be economically empowered

2.               Will Microfinance improve women's business capacity

 

HYPOTHESIS 1.

H1        There is a relationship between the access to capital through Microfinance and the empowerment of women micro entrepreneurs.

Ho         There is no relationship between the access to capital through Microfinance and the empowerment of women micro entrepreneurs.

 

HYPOTHESIS 2

H1          There is difference in access to capital on the basis of business type.

Ho         There is no difference in access to capital on the basis of business type.

 

HYPOTHESIS 3

H1          There is a combined contribution of age and marital status to the empowerment of women micro entrepreneurs.

Ho         There is no combined contribution of age and marital status to the empowerment of women micro entrepreneurs.


 

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