Economic Growth and Microfinance Banks’ Performance in Nigeria Over the Period 1992 To 2021

Abstract

The study empirically examined the relationship between microfinance bank and economic growth in Nigeria over the period 1992 to 2021. The study employed the ordinary least square econometric technique for the analysis of data. The results from the analysis indicate that microfinance bank return on assets (MFROA) (a proxy for performance) and microfinance bank deposits (MFD) have significant positive relationship with economic growth in Nigeria. Meanwhile, while those of microfinance loans (MFL) have significant negative impact on growth, those of microfinance bank investment (MBI) does not have significant impact on economic growth in Nigeria within the investigating period. The study recommends among others that, Government should find ways of encouraging other financial institutions to support microfinance banks and institutions with more funds that will enable them provide better financial services by way of microcredits to small businesses in the country. Also, management of microfinance banks should ensure that appropriate productive investment that will enhance their overall profitability, should be embark on.