THE ROLES OF MICROFINANCE BANK IN NIGERIA

CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Small and Medium Scale Enterprises in Nigeria constitutes a greater percentage (75%) of all the registered companies in Nigeria. They have been in existence for a long t ime as majority of SMEs' grew from Cottage Industries. The operations of SMEs' are found in all the areas of human endeavours: Manufacturing, Production, information, Services, Agriculture, Hotel and Restaurants, Financial Intermediation, Real Estate, Education, Building and Constructions, Mining and Quarrying. For SMEs' to operate in these sub-sectors of the economy, they are not left without controls. Federal government through the apex bank (CBN) monitors the activities of SMEs to ensure that they work in line with the set standards in other countries. The government set several agencies like small and medium scale industries equity investment schemes (SMIEIS), small and medium          enterprise development agency (SMEDAN).
Nigerian agricultural  Cooperative and rural development bank, (NACRDB), Bank of industry (BOI), Nigerian bank for commerce and industry (NBCI), Nigerian industrial development Bank (NIDB). They are set to moderate, monitor, finance and control SMEs’ to ensure that they are resurrected to be the major driver of our economic development and growth (Onugu, 2005).
A major/remarkable breakthrough in small scale business came about through the indigenization Decree 2002 and later in Nigeria Enterprise Promotion Act 2007. These were genuine attempts by the Federal Government to make sure that Nigerians play an active and worthwhile role in the development of the economy. In the National Development Plan, the Federal government gave special attention: o the development of small scale industries particularly in rural areas. This was in recognition of the roles of small and medium scale industries, as the seedbeds and training grounds for entrepreneurs. Nigerians need to take a cue from economic history, which is well stocked with enough insight into the humble beginnings of the present day giant conglomerates which started as small scale outfit. Within this decade, the government policy measures placed emphasis on the technological development of small scale industries in Nigeria. Various governments embarked on corrective measures to focus efforts towards the maximum exploitation of natural resources, and tried to discourage capital intensive mode of production in the light of the abundant resources available. 
The federal and state governments have both contributed to the growth of small scale industries in Nigeria especially in the rural areas. In recent time, various fiscal and non- fiscal incentives have been established for investors and entrepreneurs in the small scale sectors of the economy. Of special mention was the strategy adopted by the federal government for the training and motivation of the unemployed graduates, to be gainfully employed in out of school entrepreneurship development programmes. Thus, on the presentation of viable feasible projects, approved loans are disbursed through pre-selected commercial banks assisted by the National Directorate of Employment CBN (2010). To show its seriousness, the federal government through its educational agencies like the National Board for Technical Education (NBTE), the Nigerian University commission (NUC), and the National youths Service Corps (NYSC) programme gave directives that entrepreneurial development courses be incorporated into the curricular of tertiary institutions and NYSC program.
1.2 Statement of the Problem
SMEs represent a veritable vehicle for the achievement of National Economic objectives: Employment generation, value added, rural development acceleration, stimulation of entrepreneurship vital links between agriculture and industries, supply parts and components to large scale industries (LSI), contribute to domestic capital formation (Anyanwu, 2001). Despite incentives, polices, programmes and support by the government aimed at revamping SMEs, they have performed rather below expectations in Nigeria (Salam, 2012). Why? To address the above, this study embarked to identifying the various problems faced by SMEs in the procurement of loans from commercial banks, the effect of government policies on SMEs as well as the contribution of SMEs towards the growth and development of Nigeria’s economy.
1.3   Objective of the study
The main objective of this study is to determine the degree of accessibility of credit facilities from Microfinance Institute by Small and Medium scale Enterprises from five selected SMEs in Anaocha L.G.A, Anambra State. Specific Objectives
1.   Determine    whether       SMEs    encounter problems    toward    accessing Microfinance loan in Anaocha L.G.A
2.  Determine whether Government policies favoured SMEs in Anaocha L.G.A
3.  Determine whether SMEs have knowledge about MFBs in the studied Area.
4.            To find out the best and most efficient way of handling these factors with a view of finding solutions.
1.4   Research Questions
The following research questions were formulated to guide the research objective;
1.  What are those factors influencing small scale businesses towards accessing Microfinance loan?
2.  Have government policies favored SMEs?
3.  Do SMEs have knowledge about Microfinance Banks?
4.  What are the possible solutions to these factors influencing SMEs?
1.5   Statement of the Hypothesis
Ho1: To a large extent SMEs do not encounter problems in the procurement of loans from commercial banks.
Ho2: To high degree government policies have not favoured small and medium enterprises in Anaocha Local Government Area.
Ho3: To high degree SMEs have no knowledge about MFB in the Anaocha L.G.A.
1.6   SIGNIFICANCE OF THE STUDY
This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.7   SCOPE OF THE STUDY
This study explores the multifaceted roles of microfinance banks in Nigeria, examining their impact on financial inclusion, poverty alleviation, and economic development. The scope encompasses a comprehensive analysis of microfinance operations, regulatory frameworks, and socio-economic outcomes, providing valuable insights into the sector's significance and challenges within the Nigerian context.
1.8   LIMITATION OF THE STUDY
The demanding schedule of respondents at work made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaire in timely fashion was very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all businesses or organizations but is restricted to the selected organization used as a study in this research especially in the locality where this study is being conducted. Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided.
Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9   DEFINITION OF TERMS
1.     Microfinance Bank: A financial institution that provides a range of financial services, including loans, savings, and insurance, primarily targeting small-scale entrepreneurs and low-income individuals to facilitate economic empowerment and community development.
2.     Financial Inclusion: The process of ensuring access to essential financial services, such as credit and savings, for individuals and businesses in underserved and economically marginalized communities, fostering broader participation in the formal financial system.
3.     Poverty Alleviation: Efforts aimed at reducing and ultimately eliminating poverty by implementing strategies that enhance economic opportunities, income generation, and overall well-being, with a specific focus on the impact of microfinance banks in mitigating poverty levels.
4.     Economic Development: The sustained improvement in the economic well-being of a society, encompassing factors such as increased income, employment opportunities, and overall prosperity, with a particular emphasis on the contributions of microfinance banks to local and national economic growth.
5.     Regulatory Framework: The set of rules, guidelines, and policies established by regulatory authorities to govern the operations of microfinance banks, ensuring financial stability, consumer protection, and adherence to ethical standards within the sector.
6.  Socio-economic Outcomes: The observable effects and changes in the social and economic conditions of individuals and communities as a result of microfinance interventions, including improved livelihoods, entrepreneurship, and enhanced standards of living.