Impact of Microfinance on Entrepreneurial Development: The Case of Nigeria

This study investigates the impact of microfinance on entrepreneurial development of small scale enterprises in Nigeria.

Given the importance of microfinance to entrepreneurial development, the Central Bank of Nigeria adopted it as the main source of financing entrepreneurship in Nigeria. Despite this, finance remains one of the major hindrances to entrepreneurial development in Nigeria. The study collected data from a sample of enterprises in Lagos State to determine the relationship between entrepreneurial development and microfinance. Findings reveal that:

• Significant difference is observed in the number of entrepreneurs who use MFIs and those who do not;
• Significant effect of MFI activities is observed in predicting entrepreneurial productivity;
• No significant effect of MFI activities is observed in predicting entrepreneurial development;
• Microfinance has affected entrepreneurship in the country positively.

MFIs are key players in the financial industry, and have positively affected individuals, business organizations, other financial institutions, the government and the economy at large through the services they offer and the functions they perform in the economy. The study recommends that MFIs develop greater interest in supporting small and medium enterprises.