This study empirically investigates the place of microfinance in the Nigeria economy from 1992-2012, using quarterly data. It adopts multiple regression model and Granger causality test as method of analysis. The regression analysis result reveals that microfinance operations (captured by the loans and advances they offer to the members of the society by microfinance banks) have statistically significant positive impact on the Nigeria economy. That is, the more the activities of microfinance institutions in Nigeria, the higher would be the growth of the economy. Furthermore, the Granger causality test result shows a unidirectional causality running from economic growth to microfinance operations. Moving forward, government and policy makers should pay serious attention to the operations of microfinance institutions in Nigeria. At the same time, programmes and policies that would boost their activities and publicize their existence should be implemented. This would further position microfinance institutions to effectively service the very poor of the society who engage in micro, small and medium scale enterprises (MSMEs) which is the engine of economic growth.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
