The Role of Microfinance Banks in the Socioeconomic Development of Rural Communities in Cross River State
This study examines the influence of microfinance bank operations on the socioeconomic development of rural communities in Cross River State (CRS), Nigeria. It also examines the influence of Central Bank of Nigeria’s (CBN) credit policy on the supply of credit to institutional borrowers such as microfinance banks.
The study uses two sets of data, one from CBN and another from a structural questionnaire. It introduces the simple percentages method to investigate the physical characteristics of 840 respondents from the fifteen communities sampled. Findings include:
- CBN credit policy has a significant effect on the supply of credit to microfinance banks;
- Microfinance bank operations have no significant effect on the demand for credit by small scale business enterprises;
- Microfinance bank operations have no significant effect on the socioeconomic development of rural communities in CRS.
The paper recommends that the government should adopt policies such as deregulation of the operations and activities of microfinance banks in CRS and Nigeria at large, if it wants to prevent further economic meltdown.
