THE IMPACT OF MICROFINANCE BANK ON SMALL AND MEDIUM SCALE ENTERPRISES IN OFFA KWARA STATE

ABSTRACT This study examines the impact of microfinance banks on the development of small and medium scale enterprises (SMEs) in Offa, Kwara State, Nigeria. Microfinance banks were established to provide financial services such as loans, savings, and advisory support to low-income individuals and small business owners who lack access to conventional banking services. The study focuses on how microfinance banks contribute to SME growth through access to credit, business support services, and financial inclusion. A descriptive survey research design was adopted, and data were collected through questionnaires administered to SME owners in Offa. Findings from the study reveal that microfinance banks play a significant role in enhancing business growth, improving capital base, and promoting entrepreneurship. However, challenges such as high interest rates, short loan repayment periods, and inadequate loan size limit their effectiveness. The study concludes that microfinance banks have a positive impact on SMEs in Offa and recommends improved loan conditions, reduced interest rates, and better financial advisory services to enhance SME development.