The Role of Microfinance in Poverty Reduction in the Bauchi State of Nigeria
Subject Areas : International Journal of Finance, Accounting and Economics Studies
1 - Federal University of Technology, SMIT, Accounting Department Yola, Adamawa State, Nigeria.
Keywords: Tobit regression, Microfinance, Poverty Reduction, Demographic factors, Nigeria,
Abstract :
The study aimed at examining the role of microfinance in poverty alleviation in the Bauchi state of Nigeria. Data were collected from the respondent using a questionnaire. The study samples are made up of 50 DEC microfinance clients and non-clients. The sample respondents included 30 clients and 20 non-clients of DEC microfinance in Bauchi state of Nigeria. The Tobit regression model was used in the data analysis. This study discovered micro-credit and the nature of the business to be negative but significantly related to poverty reduction. Duration of membership and qualification was found to be significant and positively related to poverty reduction. The study concluded that microfinance institutions should establish a system that can be used to properly monitor the activities of the field staff during the distribution and collection of micro-credit. This mechanism or system if adequately put in place, would ensure that the field workers do not take undue advantage of the microfinance beneficiaries.