Microcredit Scheme and Millennium Development Target of Poverty Eradication in Nigeria: A case of Ilorin Metropolis

Sakariyahu, Ola Rilwan ; Ibrahim, Wasiu Oluwatoyin ; Abdulmumin, Biliqees Ayoola (2016-06)

Article

This study examines the role of microfinance banks in the attainment of the Millennium Development Goal target of poverty eradication in Nigeria.Other specific objectives of the study include assessment of the impact of microfinance banks in the mobilization and disbursement of funds among the poor;examining the role of microfinance banks in improving the standard of living of the poor and an assessment of the roles of microfinance banks in promoting the financial success of their customers.The study purposely sampled three microfinance banks in Ilorin metropolis,Kwara State.A total of ninety copies of questionnaires were administered on both staff and customers of the three sampled microfinance banks and upon completion,only sixty were found to be worthy of use.The inferential statistics used for the data analysis was the Kruskal-Wallis test.From the hypotheses tested, it was revealed that microfinance banks have been instruments for mobilization and disbursement of funds among the poor.However, MFBs have not improved the standard of living of their customers and they have not contributed to the financial success of their customers.Based on the results of this research work,it was concluded that MFBs have not significantly contributed to the attainment of the MDG target of poverty reduction in Ilorin metropolis.The study therefore recommends that the Central Bank of Nigeria strictly monitor the disbursement of funds by the MFBs to ensure they are granted to deserving low income earners and the rural poor.Also, the CBN must consider fixing low Monetary Policy Rate for the MFBs separate from the conventional commercial banks.This will allow MFBs grant credit to their customers at a very low interest rate.

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