Microfinance and Poverty Reduction Strategy for Promoting National Development: The Challenge of Social/Financial Inclusion
No Thumbnail Available
Date
Journal Title
Journal ISSN
Volume Title
Publisher
Medwell Journals
Abstract
Description
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 (1.1DGs) 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 hlllllan development. The study concludes with the recommendation that there is a critical
need to revise the statutory framework for the establishment of micro finance 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, micro finance
should not been seen as an avenue for profit making purpose by the rich but a mechanism to help people out
of poverty.
Keywords
H Social Sciences (General), HM Sociology