MICROFINANCE BANKS INTERVENTIONS ON POVERTY REDUCTION: A STUDY OF SELECTED MICROFINANCE BANKS IN ABUJA, NIGERIA

Abstract

Microfinance Banks have garnered significant attention as vehicles for poverty alleviation and economic development, particularly in developing countries. Understanding the factors influencing the effectiveness of microfinance interventions in promoting economic outcomes such as job creation and income generation is crucial for policymakers, practitioners, and researchers alike. This study aims to investigate microfinance banks interventions on poverty reduction in Abuja, Nigeria. The study employed a quantitative research approach, utilizing regression analysis to analyzed 686 data collected from customers of LAPO Microfinance Bank Limited and NPF Microfinance Bank Headquarters, all in Abuja Nigeria. The data encompassed information on microfinance processes and features, including group lending and targeting women. Three regression models were developed, with job creation and income generation as dependent variables, respectively. The regression analysis involved estimating the coefficients of the independent variables to determine their impact on the dependent variables. Both unstandardized and standardized coefficients were examined to assess the direction of the relationships. The significance levels of the coefficients were assessed using t-tests, and collinearity statistics were examined to ensure the robustness of the models. The regression analysis revealed several significant findings. Group lending emerged as a significant predictor across all two outcomes, demonstrating a positive impact on job creation and income generation. Targeting women also exhibited positive effects on economic outcomes. The findings underscored the importance of microfinance banks proxies, such as group lending and targeting women. Based on the findings, the study recommended that Policy makers and practitioners should focus on strengthening these aspects of microfinance banks interventions to maximize their impact on poverty reduction and economic development.