THE IMPACT OF MICROFINANCE INSTITUTIONS ONECONOMIC GROWTH IN NIGERIA
Keywords:microfinance institutions, economic growth, loans
The study adopted a descriptive analysis and graphical approach in expressing the readily available data between 1992 and 2017 on how the microfinance institutions affected the following economic indexes used in the study: agriculture and forestry, mining and quarrying, manufacturing and food processing, real estate and construction, transport/commerce and other subsectors of the economy. The purpose of the study was to investigate the unimpressive performance of microfinance institutions in Nigeria over the past two decades. The result indicated that the loans from microfinance institutions had a positive impact on the selected macroeconomic sector and enhanced sector al productivity of the country as illustrated graphically in the study, and had a positive effect on the gross domestic product of Nigeria. Though, with a significant improvement in the operational modalities of the microfinance institutions, there will be an improved output, which will have a multiplier effect on the agriculture and forestry, mining and quarrying, manufacturing and food processing, real estate and construction, transport/commerce and other subsectors of economy as alighted in the study. The study, therefore, recommends that interest rates should be reduced on the loans given to the alighted subsectors to enhance economic growth.
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