You have no items in your shopping cart.
ABSTRACT
The study investigates the determinants of microfinance bank lending in Nigeria.The goal of the study is to examine the relationship between microfinance banks deposits and microfinance banks loans and advances, investigate the relationship between interest rate and microfinance banks loans and advances, examine the relationship between liquidity ratio and microfinance banks loans and advances, investigate the relationship between inflation and microfinance banks loans and advances. A time series data survey covering the period 2000 - 2021 is used for the study. This study employs OLS econometric technique and descriptive statistics for the empirical estimation of the model.
The outcome of the study revealed that That inflation rate has a negative relationship with microfinance bank’s lending in Nigeria but statistically insignificant at 5% level. Interest rate has a positive impact on microfinance bank’s lending in Nigeria but statistically insignificant at 5% level. Liquidity ratio positively affect microfinance bank’s lending in Nigeria and statistically significant at 5% level. Capital adequacy is positive and statistically significant with microfinance bank’s lending in Nigeria. Finally, Bank total assets is positively and significantly related to microfinance bank’s lending in Nigeria.
The study however recommends that sound inflation policy should be instituted by the monetary policy makers, as an effective measure of managing inflation rate. It is equally suggested that relevant regulatory authorities should pay more attention to macroeconomic stability and the enhancement of efficiency which will guarantee a more stable economic environment which in turn will encourage the performance of banking sectors for interest and inflation rate stability in Nigeria economy. Finally, capital adequacy and bank size should be effectively managed, because failure of effectively managing same will result in an adverse effect.
