Chapter one: Introduction

1.1  Background of the study

1.2 Statement of the Problem

1.3  Objectives of the Study

1.4 Research Question

1.5 Research hypothesis

1.6 Significance

1.7 Scope of the study

1.8 Limitation of study

1.9 Definition of terms

Chapter two: Review of Related Literature

2.1 Introduction

2.2  Concept of Micro-Finance Bank

2.3 Policy guideline for Micro-Finance Institution

2.4 The role of Small and medium scale business in Development of the state and Nigeria economy

2.5 Micro Finance

2.6 Theoretical framework

Chapter three: Research Design and Procedure

3.1 Introduction

3.2 Research Design

3.3 Area of the study

3.4 Population of the study

3.5 Sample size and sampling technique

3.6 Instrument

3.7 Administration of the Instrument

2.8 Validity and Reliability of the Instrument

3.9 Method of Data Collection

3.10 Method of data analysis

 Chapter four: Data Presentation, analysis and Interpretation

4.1 Introduction

4.2 Analysis of Questionnaire Administration

4.3 Respondent profile analysis

4.4 Presentation and analysis of Research question

4.5 Analysis and Testing of Hypothesis

4.6 Discussion of findings

 Chapter five: Summary, Conclusion and Recommendations

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendations







Microfinance bank is a source of financial services for entrepreneurs and small business lacking access to banking and related services.  Micro finance bank is one devoted to extending small loans, referred to as micro loans, to individual businesses, and organizations in low-income regions, including under-developed countries where small amounts of money can go a long way. The concept of micro finance as a tool for economic development involved in social investing that is fostering the growth and economic development in a vulnerable region by extending loans to families business and entrepreneurs.

The history of micro finance begins with one man and one village. Orameen bank was the first micro finance bank and it was established by Muhammad Yunus, a native of Bangladesh. 1976.

But micro finance loans are designed for providing financing to the most under privileged regions in the world. Micro finance banks play at the lowering of the credit delivery system with the aim of extending credit to the poor but economically active members of society. The purpose of this paper is to chronicle the role of sustainable micro finance banking in the economic development. Micro finance was set to reduce the r ate of poverty through empowering people by increasing the access to factors of production especially credit.

The federal government in the attempt of achieve the above stated objective issued guideline through central bank to establish micro finance  institutions (MFI) that could carry on the business of providing micro financial service such as saving loans domestic find transfers and other financial support service. (Epertor 1994) bolter the fill potential of the micro business in the developmental process have not been realized owing to numerous bottle necks such as hack of funds and insecurity of the of the micro finance operate. Microfinance help in the article in specific to small loan for financial services to the poor, see microfinance for small payments while micro credit is the extension very small loans (microloans) to improve shed borrowers. Who typically lack collateral, steady employment and a verifiable credit history. It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension. In many communities, women lack the highly stable employment histories that provide a wider range of financial services especially savings accounts to the poor also in credit is widely used in developing countries and is presented as having enormous potential as a tool for poverty alleviation. Micro credit has generated finds benefits to numerous small loans for entrepreneurial activities to the poor as a way to alleviate poverty in looking at economic development in Akwa Ibom State. Microfinance has enrich microfinance institutions through microfinance bank in granting loans to the poor entrepreneur, business men and women, student and engine of economic growth and self substances.


One society has become a society of business and organization. The establishment of microfinance banks in Nigeria is aimed at providing micro-credit loans to the poor and providing assist to the unprivileged and assisting the community so as to fast the growth of development. Microfinance institution or bank helps to boost the activities of the banking sector by providing funds to the small scale business, entrepreneurs but most time this vision is not actualized and maybe marred by several factors. In view of this problem it pertinent to carry out a research on this topic to examine the challenge and how microfinance bank can affect the development of microfinance banks so as to improve the economy of the country, state, communities and to eradicate poverty and boost economic growth development. This will be translated to reduction in rate of poverty and stability of living and encourage business men to invest in microfinance bank as a tool which Nigerian through CBN enrich the poor through establishing microfinance institutions to given out loans to the poor, small scale business men, students, unprivileged one to start up a business.


The objectives of the study aim at the following

  1. To ascension the extent at which the strategies of microfinance institutions operate in a business and small scale business, farmers, student, and artisans through microfinance bank.
  2. To examine whether there is saving culture amongst individual and co-operatives in rural area and beyond.
  3. To examine the extent of infrastructural provision of financial service to the poor by given loans through microfinance banks.
  4. To investigate some variables that may influence the use of CBN policies in microfinance institution
  5. The effect of microfinance institutions to provides the credit access and financial service needed to develop income earning business
  6. To determine how government can elevate poverty through the means of establishing microfinance banks, have access needed for financial substances
  7. How microfinance institutions provide services within communities that have limited resources and few avenues for economic development

1  Does microfinance banks contribute to the growth and development of small scale business?

  • Does microfinance banks grants loans to small scale business owners
  • Does microfinance banks faced challenge in helping small business to grow.
  • Does loans granted by microfinance banks effectively utilized by small scale business owners.

Ho:            Microfinance banks does not contribute to the growth of small scale business

Hi:             Microfinance banks do contribute to the growth of small scale businesses

Ho:            Microfinance banks do not grants loans to small scale business owners

Hi:       Microfinance bank does not face challenges in helping small scale business to grow.

Ho;      Loan offered by microfinance to small scale business owners are not effectively

Hi:  Loans offered by microfinance to small scale business owners are effectively utilized


This study is focused on the effect of microfinance bank on the development of small scale business in Usmer Water depot. Firstly its provides small scale business, entrepreneurs, entrepreneurs microfinance institution fill a needed gap within the financial service industry by offering small loans, or micro-loans, to people unable to access conventional loan services. Microfinance institutions vary in size and function with some organizations focusing entirely on micro financing, while others works as extensions of large investment banks. That people, traders under developed areas can access needed financial resources through the services provided by microfinance institutions.

As a researcher this study has help to give ideal on how to developed and improve small scale Business men through the help of setting loans from the microfinance banks. Firstly it help the student of the higher learning in their research in the sense that it will serve as a source of information in their future on how microfinance has contributed to the society and improve the standard of living mostly in Akwa Ibom State.

To the organization microfinance has imported and providing financial support to organization that are economical mail down and creating employment engender rural development and reduce poverty. Many organization seek loans assistance  from bank in keying to the sector of providing employment financial support to the poor low come earners and boost the economic mostly the traders and increased savings opportunity and other organization to key into banking sector and create job opportunities.

To the other research it give an insight on how to calculate, developed knowledge and strategies on how data collection information in scheme of micro credit loans establishment also it entails on how important micro finance has help in solving and reducing poverty in the state and both Nigerian. It also give the researcher to key in to bank saving and have access to financial services and how he/she can control the affairs at banking sector if he/she has the opportunity and play a significant role for a better living at the people.


This research work was to access the effect of microfinance banks on the growth of small scale enterprise with a particular focuses on Usmer Water Depot a small scale business based in Uyo. The scope of this study covers the activities and contribution of microfinance banks was established mainly to provide financial to provide financial assistance to the growth and development of small scale business which are the panacea for the economic development. They also grants loan, charging low interest rate, provision of ideas, technology, new business ventures and also advising the effective utilization of loans granting.


The study was conducted in Akwa Ibom State especially in Uyo among Usmer Water Depot and small scale business operators. it contain constraints on the research work due to lack of information from Questionnaires, unavailability of sufficient related literature lack of enough time, financial and material resource. Transportation which was a setback to this project and information extracted from journals and periodicals.

  1. INFORMATION: This refers to facts relating to the microfinance and micro development among petty traders and as defined as the data which has been processed recipient and which of real perceived valve for the intended purpose of information.
  2. MICROFINANCE: A type of banking service that is provided to unemployed, low-income individuals, group of gaining financial service and creating opportunity to become self sufficient.
  3. MICRO CREDIT: Is part of microfinance which provides a wider range of financial service, especially saving account, to the poor and to help eradicate poverty through wealth creation.
  4. ENTREPRENEUR: Is the process of starting a business on other organization. He is the decision making individual who receives profits as his reward and bears the risk and he operates within an entrepreneurship ecosystem.
  5. SAVING: Is refers to income not spent or deferred consumption
  6. SAVINGS: Refers to something that exists in any time, a stock variable.
  7. MONEY: An officially issued legal tender generally consisting of currency and coin. Money is the circulating medium of exchange of goods and services and it can starts as negotiable instrument such as checks.
  8. TRADE: Is seen as transfer of the ownership of goods or services from one person or entity to another in exchange for other goods or services or for money.
  9. MICRO ENTERPRISE DEVELOPMENT: This deals with work with poor people utilizing small amounts of money, in order to serve their particular micro-business and financial needs.

10. financial establishment that invests money deposited by customers pays it out when required makes loans at interest and exchange s currency in involves deposit money or valuables in a bank and accept deposit. There are two types of bank commercial/retails banks and investment banks.



Leave a Reply