THE IMPACTS OF MICRO FINANCING ON THE PERFORMANCE OF WOMEN ENTREPRENEURS

CHAPTER ONE

1.1  Background To The Study

Microfinance is the facilitation of financial services to meet the needs of low-income individuals such as micro-entrepreneurs, such as the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance, and the enhancement of simple payment services required by micro-entrepreneurs and economically active poor people who do not have access to financial services provided by the formal banking sector (USAID, 2000). The loans are small in size and are intended for business ventures. The loans are collateral-free, group-based, and mostly directed to women entrepreneurs, with low or no interest charges and a focus on women and low-income clients. The emphasis is shifting to women because of their ability to manage small amounts of money profitably (UNITUS, 2000).

1.2  Statement of the Problem

Microfinance is the facilitation of financial services to meet the needs of low-income individuals such as micro-entrepreneurs, such as the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance, and the enhancement of simple payment services required by micro-entrepreneurs and economically active poor people who do not have access to financial services provided by the formal banking sector (USAID, 2000). The inability of the poor and small business owners to obtain traditional banking services prompted the development of a microfinance policy to address the financial needs of this poor and vulnerable segment of society, particularly women. The loans are small in size and are intended for business ventures. The loans are collateral-free, group-based, and mostly directed to women entrepreneurs, with low interest rates or fees.

Interest-free loans with a focus on women and low-income clients The emphasis is shifting to women because of their ability to manage a small amount of money profitably (UNITUS, 2000). The study will thus look into the impact of microfinance on the performance of female entrepreneurs in Kaduna state.

Several years after the microfinance policy was implemented, a greater number of the poor and vulnerable poor segment have yet to fully reap the benefits of financial services such as obtaining microcredit facilities for entrepreneurial businesses. It is important to note that, while microfinance banks are eager to disburse funds to this segment, they are constrained by limited financial resources to meet the large number of clients seeking microcredit. Savings accountBecause of the nature of the segment’s activities, is low. As a result, there is a need to re-evaluate microfinance activities on the performance of women entrepreneurs in order to identify the challenges. Microfinance banks face challenges in carrying out their constitutional mandate to provide financial services to the economically active but poor segment of society, particularly women. As a result, the research problem is to determine the effects of microfinance on the performance of women entrepreneurs in Kaduna state.

1.3 Objectives of the Study

To investigate the effects of microfinance on the performance of female entrepreneurs in Kaduna state.

1.4 Research Questions

What effect does microfinance have on the performance of women entrepreneurs in Kaduna state?

1.5 Significance of the Study

The study will shed light on the role and impact of microfinancing on the performance of female entrepreneurs in Kaduna State.

1.6 Research Hypothesis

Ho The impact of microfinance on women’s performance in Kaduna state is minimal.

Hi Microfinance has a significant impact on women’s performance in Kaduna state.

1.7 Scope of the Study

The study examines the impact of microfinance on the performance of female entrepreneurs in Kaduna state.

1.8 Limitations of the Study

The study looks at how microfinance affects the performance of female entrepreneurs in Kaduna state.

1.9 Definition of Terms

DEFINITION OF A MICROFINANCE BANK

Microfinance is the facilitation of financial services to meet the needs of low-income individuals such as micro-entrepreneurs, such as the provision of small loans (microloans), small savings deposits (micro-savings), micro-insurance, and the enhancement of simple payment services required by micro-entrepreneurs and economically active poor people who do not have access to financial services provided by the formal banking sector (USAID, 2000). The loans are small in size and are intended for business ventures. The loans are collateral-free, group-based, and mostly directed to women entrepreneurs, with low or no interest charges.

DEFINITION OF ENTREPRENEURSHIP

Entrepreneurship is the ability to recognize and pursue new business opportunities with the goal of starting, owning, and operating a company.

 

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