EFFECT OF ENTERPRISE RISK ON FINANCIAL PERFORMANCE OF NATIONAL MICROFINANCE BANKS IN NIGERIA

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dc.contributor.authorFagbemi, Temitope Olamide
dc.contributor.authorOsemene, Olubunmi Florence
dc.contributor.authorOladipo, Samson Idowu
dc.date.accessioned2020-05-22T23:15:00Z
dc.date.available2020-05-22T23:15:00Z
dc.date.issued2016
dc.description.abstractMicrofinance banks’ (MFBs) operation has been contributing its quota to the economic development of Nigeria. Nevertheless, onward revocation of 224 MFBs licensed by Central Bank of Nigeria (CBN) and eventual closure of 103 MFBs by Nigerian Deposit Insurance Corporation (NDIC) in 2010, and another 83 MFBs in 2014 put to question the practice of enterprise risk management by MFBs in the country. Therefore, this study examined the effect of enterprise risk on the financial performance of national microfinance banks in Nigeria and specifically assessed the effect of credit risk, liquidity risk and solvency risk on the financial performance of national microfinance banks in the country. Using ex-post facto research design, this study used audited financial statements of five (5) out of the total of seven (7) national microfinance banks operating in Nigeria as at December 31, 2015. The data obtained for this study were analysed using both descriptive statistics as well as panel least square regression analysis. The study revealed that credit risk (with coefficient of -0.2276 and P-value 0.012) has inverse and significant effect at 5% level of significance, while both liquidity risk (with coefficient of 0.0153 and P-value 0.319) and solvency risk (with coefficient of 0.0241 and P-value 0.418) have positive correlation with the return on asset of national microfinance banks in Nigeria but statistically insignificant at 5% level of significance. The study concludes that enterprise risk has a significant effect on the financial performance of national microfinance banks in Nigeria. Hence, this study recommends that CBN and NDIC should continually ensure strict adherence of microfinance banks’ board of directors to its prudential guidelines to possibly forestall instances of distressed MFBs and their sudden insolvency.en_US
dc.identifier.citationFagbemi, T. O., Osemene, O. F. & Oladipo, S. I. (2016): Effect of Enterprise Risk on Financial Performance of National Microfinance Banks in Nigeria. Sahel Analyst: Journal of Management Sciences, 14(2), 63 – 93. Published by the Faculty of Management Sciences, University of Maiduguri, Nigeriaen_US
dc.identifier.urihttp://hdl.handle.net/123456789/3974
dc.language.isoenen_US
dc.publisherFaculty of Management Sciences, University of Maiduguri, Nigeriaen_US
dc.subjectRisk appraisal,en_US
dc.subjectMicrofinance banks,en_US
dc.subjectPerformance, Solvencyen_US
dc.titleEFFECT OF ENTERPRISE RISK ON FINANCIAL PERFORMANCE OF NATIONAL MICROFINANCE BANKS IN NIGERIAen_US
dc.typeArticleen_US

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