Authors : M.E. Egharevba, A. Eguavoen, D. Azuh, T.C. Iruonagbe and I.A. Chiazor
Abstract: Development involves the sustained elevation of an entire society and social system toward a better life by equipping the populace with the means of overcoming poverty, helplessness and misery. The core essence of development includes sustenance, self-esteem and freedom from servitude which constitute the fundamental human needs of humanity. When these goals are absent or in short supply, condition of underdevelopment exists. Development becomes an indispensable goal of meeting life sustaining basic needs; gaining esteem, respect and emancipation from social servitude, oppressive institutions and expanding the range of choices for societies and their members without external constraints. Thus, microfinance institutions represent one of the catalysts to extricate people from poverty and advance economic growth and national development. Using secondary sources of data, the study obtained that the role of microfinance institutions in promoting financial/social inclusion and poverty reduction in Nigeria is far from been attained. This is evidenced by the country’s inability to attain the Millennium Development Goals (MDGs) target 1; over 70% of Nigerians are living below the poverty line, including poor employment opportunities. Furthermore, many of the microfinance institutions are still encumbered with the myriad of problems that confronted the erstwhile community banks which include lack of access to financial services for the poor especially in the rural areas, insufficient credit facilities, high interest rates for loans, poor saving culture, low level of financial literacy and urban bias in banking services. The study stressed that poverty challenge in the country remains daunting as many of the disadvantaged and economically active poor remain financially excluded, thereby impeding economic growth and human development. The study concludes with the recommendation that there is a critical need to revise the statutory framework for the establishment of microfinance institutions in Nigeria with strict monitoring mechanism put in place to ensure these institutions adhered to their goal of promoting poverty reduction among the poorest segment of the population, majority of which live in rural areas. In all, microfinance should not been seen as an avenue for profit making purpose by the rich but a mechanism to help people out of poverty.
M.E. Egharevba, A. Eguavoen, D. Azuh, T.C. Iruonagbe and I.A. Chiazor, 2016. Microfinance and Poverty Reduction Strategy for Promoting National Development: The Challenge of Social/Financial Inclusion. The Social Sciences, 11: 5373-5386.