Authors : Solomon A. Olakojo and Dayo B. Olanipekun
Abstract: Community/microfinance finance banking serves a critical role in the economy by providing financial support not only to the small and medium scale enterprises but also to the real sectors in the economy. Using pooled regression and Ordinary Least Squares (OLS) techniques and yearly data covering 1992-2008, an important finding of the study is that the current level of sectoral output is generally positively influenced by loan and advances in the sectors used for the study. However, a sectoral analysis using OLS shows that while loan and advances from microfinance/commercial banks positively influenced output of manufacturing, building and construction and mining and quarrying sector, the same could not be established for the agricultural sector. An important policy recommendation of the study is that caution needed to be made in giving loan and advances to farmers by the microfinance banks but giving incentives in forms of basic amenities in the rural areas, provision of necessary agricultural inputs by government to the sector may go a long way in boosting its output.
Solomon A. Olakojo and Dayo B. Olanipekun, 2011. Community/Microfinance Banking and Sectoral Growth: An Empirical Lesson from Nigeria. Journal of Economics Theory, 5: 50-54.