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ABSTRACT
The study examines the effect of capital structure on microfinance banks (MFBs) performance in Nigeria. The study employed the descriptive statistics, correlation analysis, Augmented Dickey-Fuller unit root test and the Ordinary Least Square (OLS) methodology to analyze the quarterly time series data sourced from CBN Statistical Bulletin. The findings specifically found that leverage has significant positive effect on microfinance banks performance. With regards to the control variables, Liquidity has a significant negative effect on microfinance banks performance in Nigeria. Firm size did not significantly affect banks performance during the studied period. Inflation rate negatively impact MFBs performance in a non-significantly way. Interest rate on the other hand has significant negative influence on MFBs performance during the studied period. The study concludes that capital structure, liquidity and interest rate are significant determinant of MFBs performance and the in Nigeria during the studied period.
