THE IMPACT OF MICROFINANCE ON ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA
Abstract
ABSTRACT
Entrepreneurship plays a vital role in driving innovation, employment, and economic growth, particularly in developing countries like Nigeria where access to financial resources remains a major constraint. This research work examined the impact of microfinance on entrepreneurship development in Nigeria, using Akoko South West Local Government Area of Ondo State as a case study. The study employed a descriptive survey design, and data were collected through structured questionnaires administered to 300 entrepreneurs within the study area. Both descriptive and inferential statistical tools, including regression analysis, correlation, and ANOVA, were used to analyze the data. Findings revealed that access to microfinance capital significantly enhances entrepreneurial growth and sustainability by providing funds for business expansion and investment. However, high-interest rates charged by microfinance institutions were found to reduce profitability, discourage borrowing, and increase the risk of loan default among entrepreneurs. The study also established that financial literacy positively and significantly influences the effective utilization of microfinance services, improving business performance and repayment capacity. Overall, the analysis indicated a strong and statistically significant relationship between microfinance and entrepreneurship development in Akoko South West, Ondo State. Based on these findings, the study recommends that government and policymakers should regulate microfinance interest rates to make credit more affordable, while microfinance institutions should integrate financial literacy training into their lending programs. Furthermore, improved regulatory oversight and support for rural entrepreneurs are essential to maximize the developmental impact of microfinance on small and medium enterprises in Nigeria.
Keywords: Microfinance, Entrepreneurship Development, Financial Literacy, Access to Credit, Interest Rate, Small and Medium Enterprises (SMEs), Business Sustainability.
Full-Text Access Notice
In accordance with the NERD Policy on promoting peer-reviewed publication, public access to the full text of a project, thesis or dissertation is restricted for three years, allowing the author and supervisors sufficient time to pursue peer-reviewed publication.
During this period, researchers with legitimate academic or research purposes may request authorisation directly from the author to enable NERD to release the indexed full texts of the work using the form below.