Search results

There have been various forms of regulatory intervention by the central banks of countries to streamline microfinance activities and ensure effective corporate governance of microfinance institutions (MFIs). Considering the limited amount of research in this area and the need to ensure regulatory effectiveness, the purpose of this paper is to evaluate the impact of regulatory provisions on the attainment of effective corporate governance in MFIs in Nigeria and Zambia.

Interviews were conducted with regulators at the Central Bank of Nigeria and the Bank of Zambia, directors and executive management officers of MFIs and executives of apex associations of MFIs in both countries.

The paper presents five significant findings which are that the regulations have enabled negative outcomes in areas such as board composition, the ownership requirements in the regulations have resulted in differing governance implications, the certification requirements for board members are problematic in practice, supervision by regulators is ineffective and has impacts on risk management and the principle of consultation with stakeholders is inadequate in both countries.

Regulatory provisions must be robust and fit for purpose to ensure the microfinance initiative in emerging economies achieves the objectives of enhancing financial inclusion and economic development of the society.

The paper addresses an area of limited research and provides empirical findings in relation to regulation and corporate governance in developing economies, which would help to ensure regulatory effectiveness.

To improve the loan repayment performance (LRP) of microfinance banks (MFBs) in Pakistan, this study aims to look at the direct impact of multiple borrowing (MB) on LRP and client-business performance (CBP), as well as the direct impact of CBP on LRP. The moderating function of pandemic factors in the relationship between MB and CBP, as well as the mediating effect of CBP in the association between MB and LRP, was also investigated in this study.

A questionnaire was used to obtain data from 531 lower-level workers of microfinance institutions (MFIs) for the study. The respondents were chosen using stratified sampling, which divided the target population into four influential groups: lending officers in agriculture, lending officers in businesses, lending officers in gold loans and lending officers in salary loans. In this study, a two-stage structural equation modeling approach was used, including a measurement model (outer model) and a structural model (inner model). The validity and reliability of the questionnaire were investigated using the measurement model (outer model), whereas PLS-SEM bootstrapping was performed to test the hypothesis and find the relationship among different underpinning constructs by using the structural model (inner model).

The outcomes of this study demonstrate that MB has a direct impact on CBP, and that CBP has a direct impact on LRP. MB, on the contrary, had no direct and significant impact on LRP in this study. The idea that CBP mediates the relationship between MB and LRP, as well as the moderating effect of pandemic factors on the relationship between MB and CBP, is supported by this research.

Until now, the influence of MB on LRP via the mediating role of CBP and the moderating role of a pandemic factor in the setting of Pakistani MFBs has received little attention. During the COVID-19 pandemic, this research also aids MFBs in better understanding MB and its impact on LRP. Furthermore, based on the findings of this study, Pakistani MFIs can enhance their LRP by implementing new lending regulations, particularly with reference to MB and the COVID-19 pandemic.

The successful story of microfinance institutions is often tied to the practice and methods of credit delivery as evidence among international world class microfinance institutions across the globe. The purpose of this paper is to examine the impact of practice and methods of credit delivery employed by “non- profit” and “for-profit” microfinance institutions on financial sustainability and outreach programmes of the microfinance institutions in Nigeria.

The study adopts the survey research design and multi-stage stratified random sampling procedure to collect data from 372 senior management staff, managing directors and board members of microfinance institutions of both groups in Nigeria. Data collected were analyzed using descriptive statistics and multiple regressions analysis.

The findings suggest that the current practice and methods of credit delivery of microfinance in both “non-profit” and “for-profit” microfinance institutions have an inverse relationship with the financial sustainability and outreach programmes of the institutions. This study provides empirical evidence for the incessant failure of microfinance institutions in Nigeria.

The study therefore recommends an immediate overhaul of the methodology and practice of microfinance institutions in the country to align with international best practice.

In spite of the huge literature on microfinance in Nigeria, there is not enough evidence to empirically prove that the practice of microfinance has affected the performance of the industry in Nigeria. This study sets out to fill that gap in the literature. The paper examines the practice of microfinancing in Nigeria vis-à-vis the performance of the microfinance institutions, categorized into NGO and microfinance bank “for-profit” institutions using international best practices from countries where microfinance is highly successful as a benchmark for deployment of microfinance in Nigeria, in order to proffer policy direction to stakeholders on steps to take to ensure viability in the microfinance subsector in Nigeria.

The purpose of this paper is to propose the use of Islamic moral transaction mode as a moderator in sustainable Islamic microfinance banks (IMFBs) business model.

The paper highlighted the major issues of microfinance banks in Nigeria and presented an integrated model that will suffice the long-term survival of the institution. Moreover, regression analysis is also employed to examine the impacts of financial outreach on the Nigerian economic growth.

The authors find that Islamic moral transaction mode will moderate the sustainable Islamic banking business which can influence the sustenance of IMFBs and the well-being of the society through financial outreach.

The paper has empirically tested the impact of financial outreach on growth, and suggested future studies to investigate the existing relationships among the proposed model components. Therefore, further studies have the opportunity to develop measurements that will guide in testing the model, as well as strengthening its components.

Implementing this model will enhance the sustainability of IMFBs and socio-economic well-being of the society through financial outreach. Consequently, this study also suggests other policy measures that will improve the sustenance of IMFBs and the society as a whole.

The paper contributes to the existing literature of microfinance banks by linking the components of the sustainable business model to primary evidence of Sharia coupled with an in-depth link to generosity.

Microcredit schemes fashioned after the Grameen Bank model are widely acclaimed for their potential for empowering the poor through access to credit based on social collateral. However, women market vendors in Ibadan refer to microcredit loans as owo komulelanta, a term which translates as “resting the breasts on a hot kerosene lantern,” a plain critique of the stringent conditions of loan repayment. This paper presents the lived experience of borrowers based upon ethnographic fieldwork conducted between 2017 and 2019. It reflects on the Nigerian state's neoliberal policies of microfinance and the experience of women borrowers. The paper argues that social–emotional vulnerability of women borrowers is exacerbated by the acceptance of a loan due to the rigid system of repayment and harassment from providers.

This paper aims to explore the option of Sharī’ah-compliant microfinance as a viable alternative to many previous approaches adopted by the Nigerian State in tackling the menace of poverty in the land. In spite of many poverty alleviation policies and interventions of the past three decades, millions of Nigerians still live in abject poverty, while thousands of university graduates roam the streets looking for jobs. Many unemployed Nigerians with good business ideas are usually discouraged by the alarmingly high interest rate charged on start-up capitals by local banks.

To achieve its objective, this paper used both analytical and qualitative methods after thoroughly examining many relevant literature and empirical works. The study explores four Sharī’ah tools for the implementation of the proposed scheme, to wit: musharakah, mudharabah, zakat and waqf.

The study finds that the suggested Sharī’ah tools are viable and sustainable in lunching microfinance projects in the Nigerian context. The paper further argues that exploring Islamic non-interest microfinance options will guarantee the financial inclusion of a large percentage of Nigerians, pursuant to the Constitutional provision on economic rights of the entire citizenry (s.16 of the 1999 Constitution of the Federal Republic of Nigeria, as amended).

The paper identifies a yet-to-be explored viable option, with great potential not only in enhancing government policies for poverty alleviation but also in assuring a large percentage of the citizens of financial inclusion.

This paper examines mechanisms through which social capital strengthens microfinance impact on fostering female entrepreneurial success. Specifically, the study focuses on how, and to what extent, resources embedded in social networks determine MF impact on entrepreneurial success.

Survey data were collected from 276 female micro-institutions entrepreneurs using multi-stage stratified random sampling across 80 MF institutions in three South-Western Nigerian states. Hypotheses were tested using ordinal regression analysis.

The study found that relational and network social capital had a positive and significant influence on female entrepreneurial success. Specifically, intra-group trust and productive network ties amongst female entrepreneurs in poor communities predicated the positive impact of MF on entrepreneurial success. Also, resources embedded in networks are more positively correlated to education level and marital status. Furthermore, MF could have more positive impact for borrowers with sustainable relationships with loan officers who organise MF provisions and understand the entrepreneurs’ context.

The research provides empirical evidence for the relationship dynamics between female entrepreneurs and MF institutions, by emphasising the importance of deploying different forms of social capital in sustaining MF impact on female entrepreneurial success.

The purpose of this paper is to examine the impact of public policies on engendering entrepreneurship and micro, small, and medium enterprises (MSME) development in Nigeria. Gaps in policies and factors that impede entrepreneurship and MSME development are identified and proposals are offered to address the impediments.

A thorough review of the mainstream literature on entrepreneurship and MSME development is undertaken. This constitutes the reference point for identifying and reviewing specific public policies formulated and programs designed to stimulate entrepreneurial activities and facilitate MSME development. Data were obtained from federal government agencies. This paper contends that for public policies to accomplish their designed objectives of engendering entrepreneurship and MSME development, strategic realignments of various policy dimensions and programs are imperative.

Misalignments occur when existing public policies in other domains are in conflict with policies to promote entrepreneurship and MSME development. Policy misalignments negate the profit motive of entrepreneurship; stifle business innovation and expansion; and contribute to survivalist mode of entrepreneurship in the country. This thwarts the public policy goals of creating jobs and alleviating poverty.

Government needs to streamline current regulatory requirements and revamp tax policies to encourage entrepreneurs and MSMEs. Improvements in infrastructure (road networks, highways, power supply, and telecommunications) will significantly reduce overhead costs for entrepreneurs and help MSMEs to grow.

The paper demonstrates that without strategic realignments of public policies to ensure consistency and coherency in various dimensions, efforts to promote entrepreneurship and MSME development will not yield positive results. Existing public policies and programs need to be brought into tight realignment with policies and regulations in other domains to galvanize entrepreneurial efforts.

Microfinance emerged as an essential catalyst for socio-economic development and financial inclusion to reduce poverty. Microfinance institutions cannot meet their primary objective of poverty reduction if they are not sustainable financially. With the theoretical support of profit incentive theory, this paper aims to investigate the impact of organizational structure (OS), growth outreach (average loan per borrower [ALPB] and number of active borrowers), women empowerment (percentage of women borrowers [PWB]), liquidity, leverage and cost efficiency (cost per borrower) on the financial sustainability of microfinance providers (MFPs) in India and explore the possible moderating effect of the national governance indicators (NGIs).

A financial sustainability index has been developed by using principal components analysis, including both conventional measures (return of assets and return on equity) and efficiency measures (operational self-sufficiency and financial self-sufficiency). Due to the existence of endogeneity and heteroskedasticity, this study uses two-step system generalized method of moments estimates to examine the relationships for a period of 2006 to 2018.

The finding reveals that there is a strong significant relationship between financial sustainability and its influential factors. Organizatioanl Structure, loan size, women borrowers, Gross Domestic Products and inflation enhance the financial sustainability of India’s microfinance sector. However, a number of borrowers, liquidity, leverage and operating costs negatively affect the financial sustainability of MFPs of India. The estimates demonstrate that NGIs significantly moderate the association between financial sustainability and its influential factors. The NGIs negatively affect the positive impact of Organizatioanl Structure on financial sustainability. National governance increases the positive effect of loan size (ALPB) and reduces the negative effect of a number of borrowers and leverage on the financial sustainability of MFPs of India. However, NGIs negatively affect the positive relationship between Percentage of Women Borrowers and Financial sustainability of Microfinance Providers of India.

To the best of the authors’ knowledge, this study is the first of its kind that incorporates all of the six dimensions of the National Governance Indicators (NGIs) and uses as a moderator. Secondly, a financial sustainability index has been developed for measuring the financial sustainability of Microfinance Providers (MFPs).

This paper aims to examine the prospect of utilising corporate social responsibility and entrepreneurship (CSRE) as antidotes for mitigating the incidences of poverty, insecurity and underdevelopment in Nigeria. The paper derives its theoretical foundation from the stakeholder, instrumental and legitimacy theories, which all justify the use of CSRE for actualisation of Triple Bottom Line (i.e. the social, economic and environmental concerns of business organisations).

The study used the quantitative research method relying on the use of secondary data published by institutional bodies. The quantitative method entail a systematic extraction of reliable data on corporate social responsibility (CSR), insecurity, poverty and development from the publications of Office of the Millennium Development Goals in Nigeria, CLEEN Foundation, National Bureau of Statistics and Central Bank of Nigeria, respectively. For missing years, the authors improvised using projections as well as proxies. The extracted data, which spanned a period of 13 years, were subjected to econometric tests using SPSS, on the basis of which informed conclusions were drawn.

The first econometric result indicates a negative relationship between gross domestic product and poverty. The second result indicates that there is a positive significant relationship between gross domestic product and total crime rate. The third result indicates that there exists a positive relationship between gross domestic product and unemployment rate. The fourth result indicates that there is a negative relationship between gross domestic product and industrial growth rate. The last result indicates that there is a significant positive relationship between gross domestic product and CSR.

The results of this research have macro-level application, hence the outcomes cannot be narrowed to any particular sector of the economy. A micro-level analysis across diverse sectors of the economy is recommended in future studies. The implication of this empirical research is that policymakers in the Nigerian private sector need to reinvent their CSR programmes as mechanisms for poverty eradication, entrepreneurship development (CSRE), dousing tension of restive youth, empowerment/support for security agencies for better crime prevention and for impacting on sustainable development.

In the face of dwindling financial resources in the treasury of governments, the reinvention of CSRE by private sector organisations as complementary mechanisms for combating social problems is becoming acceptable in both developed and developing nations. This paper therefore boldly recommends that policymakers reinvent CSRE as development mechanisms through a sound partnership between government, advocacy groups and business corporations in Nigeria.

The paper explicates that CSR can indeed be reinvented by corporations as part of their social concerns to their operating environment instead of leaving all social problems to governments.

The research lends credence to stakeholder, instrumental and legitimacy theories of CSR. It also justifies the plausibility of CSRE, a novel concept being promoted in this research.