MICROFINANCE BANKS AND THE GROWTH OF MICRO AND SMALL ENTERPRISES

ABSTRACT
The study examined the impact of micro financing and non-credit serviceson the growth of Micro and Small Enterprises (MSEs) in Benin City. It specifically examined the extent to which MSEs have access to micro financing credits and non-credit services and whether access to micro financing credits and non-credit services influence the growth of MSEs in Benin City. In pursuance of these objectives, the study employed survey and descriptive research designs, the population comprised all micro and small enterprises in Benin City. The study adopted Taro Yamane formula to determine the sample size of 281 from the population of 945; questionnaire was used to collect the needed information from respondents. The data elicited was analysed using descriptive and inferential statistics in line with the objectives of the study. A multiple regression model was applied to determine the relative importance of the independent variables with respect to growth of MSEs. The study found high access to credit facilities of microfinance and high access to non-financial services of microfinance bank among MSEs in Benin City. The study also found that access to micro financing credits has significant influence on the growth of MSEs in Benin City. Lastly, the result of the finding of this study showed that access to non-credit services of microfinance bank does significantly influence the growth of MSEs in Benin City.Based on this study, the following recommendations are made: Government through Central Bank of Nigeria should continue to consolidate microfinance banks so as to increase their capacities to provide credits to MSEs in Benin City, in particular and in Nigeria in general; encourage microfinance banks to reduce the interest charge on loans and improve on the advisory services render to MSEs.