英语论文网

employment being so glaring and almost haven become an indelible mark on the economy, one will be wondering what has happened to all the purported efforts meant to propel the private sector to assume its alleged role of an engine of growth. Micro finance institutions are increasing in number and area of coverage in our country. But the problem is dealing with the poor (especially with credit related issues) is not as easy as poverty alleviation so that this may challenge their contribution to development. That means the rural poor have less organized way of living, widespread illiteracy and the like which hinders from participating in credit and saving programs; and hence the effort of those programs may be challenged.

With the number of MFIs increasing in recent times with close to about 28 emerging micro financial institutions in the country, little has been done to cater for the disadvantage and the poor who should have been the core beneficiaries. These increasing MFIs have not been able to reach out to the marginalized in the society. So often are individual entrepreneurs turned down by the banks in their bid to source for fund for their respective small and medium scale enterprises (SMEs) on the ground that they do not meet basic banking conditions such as provision of collateral security. In addition, most of these financial institutions are located only in the big cities with majority of SMEs in the villages and rural setting left to deal with their fate. This has a serious effect of thwarting the effort of government in the vein of creating an enabling environment for SMEs.

Aside these stringent conditions set forth by these so-called commercial and development banks, what are some of the efforts being put in place by emerging financial institutions to cater for the ordinary entrepreneur in the informal sector. One would also want to find out what factors really determine lending to SMEs? What are some of the combined roles played by emerging micro financing institutions to making borrowing a little more attractive devoid of the normal hard-to meet measures in the system?. This undoubtedly justifies the rationale for undertaking this research. The numerous research questions posed in the course of the problem statement would form the basis of the research objective.

1.1.2 Research Objectives

Basically this research will seek to;

Assess the performance of micro financing institutions as far credit to SME’s is concern.

assess the role and impact of micro-finance institutions on the livelihood of SMEs

Identify the challenges and constraints facing MFIs in their operations.

Suggest on the basis of the findings of the study, recommendations towards enhancing the capacity of MFIs in financing MFIs.

2.0 The Concept of Micro Financing

Over the past two decades, the concept of microfinance scheme has been introduced to developing countries to assist the poor. It is believed to be the provision of small loans to the very poor families to help them engage in productive activity or expand their tiny businesses. Apart from providing credit to the poor, there is a broader range of services which include savings, training in both business management, book keeping and provision of insurance schemes for beneficiaries. Steel and Addah (2004)describe microfinance as