THE IMPACT OF MICROFINANCE ON ENTEREPRENEURIAL DEVELOPMENT (CASE STUDY OF UMUAHIA ABIA STATE)

ABSTRACT

This work investigated the relationship between micro finance and entrepreneurial development aimed at reducing poverty in the economy.
The primary method of data collected from small and medium enterprise were used for their study. In the analysis table and simple percentage were used.
Major findings of this work reveals that there is a strong positive relationship between micro financing and entrepreneurial development further findings shows that provision of long term loans and equity capital by micro finance bank for enterprise are factors that militated against micro finance in the economy.
This work recommended that guidelines for micro finance institutions to finance SME’s need to be flexible to accommodate the SME’s in terms of granting them long-term loans and quality capital participation.
This will be of immense benefit to SME’s micro finance banks authority and the students of body and firms who may be interested in further research on this topic.

1.1 BACKGROUND OF THE STUDY
The issue of sustainable development in the third world countries like Nigeria has been a growing concern to both the government and the private sector. The huge amount of money the government has been investing on this platform over the years have not yielded any meaningful result. Poverty is a characteristic OF Nigeria households or individuals. It has been realized in the recent years that there are limits to which government can single promote development. Most of the traditional functions being carried out by the government in most countries ranging from the provision of economic development are becoming increasingly difficult to accomplish. Nigeria as an nation has her own administration, corruption, infrastructural decay, insecurity of lives and properties, unstable macroeconomic regime and unpredictable fiscal policies by successive administration (Fasug, 2006).

Thus, both the public and the private sector of the economy and every segment of the society process of the country. It is on this basis that government begins to engage in privatization policy with the view of allowing the private sector to participate in the economic development of the nation, consequently, various government process of the country’s economy.

One of the response to the challenges of development in the developing countries is the encouragement of the entrepreneurial development sachem. Nigeria had even taken more robust step by including entrepreneur studies in the academic curriculum of her educational system. the believe of such policy makes is that such decision will inculcate entrepreneur spirit in the mind of people so as to prepare them for wealth creation through small enterprises (Fasua, 2006).

A small scale enterprise is very crucial to the development, a
Of a country’s economy, especially countries like Nigeria. Entrepreneurship is sine qua non to national development, poverty eradication and employment general. It is the bedrock of any nations industrialization. A number of studies have been carried out on the impact of microfinance on entrepreneurial development. In fact, academic interest shows the impact of microfinance on entrepreneurial development is evidenced by the fact that some academic journals have devoted special issues to research establishing this linkage.

According to Amin, Rai and Topa (2003) focus their article on the ability of microfinance to reach the poor and vulnerable. They focus their article in such a manner because of concerns that microfinance is only serving people slightly below or above the line of poverty, however the really poor and destitute are being systematically excluded.

Thus, the question of whether microfinance improves or worsens entrepreneurial development is still worthy of further research such as the one being undertaken in this study.

1.2 STATEMENT OF THE PROBLEM
In any country of the world, microfinance helps in the development of the country by granting loans to low income earners. According to copestake, halotra and Johnson (2001) analyza the impact of microfinance on firms and individual welling. Copestake at all focus on business performance and household income to establish a link between the availability of the time, it appeared that microfinance are not financing to the poor and business client. The research went forward to research the problems of this study which are:
 Inability to encourage the development of new business.
 Inability to help existing business grow or diversity their activities
 Low rate of employment
 Inability to create employment and income opportunities through the creation and expansion of micro enterprises.
 Inability to increase the productivity and income of vulnerable group especially and the poor.
 High rate of poverty
 Economic dependence on foreign countries.