Entrepreneurship Project Topics

The Impact of Microfinance Banks in Empowering Women Entrepreneurs in Imo State, Nigeria

The Impact of Microfinance Banks in Empowering Women Entrepreneurs in Imo State, Nigeria

The Impact of Microfinance Banks in Empowering Women Entrepreneurs in Imo State, Nigeria

Chapter One

Aim and Objectives of the Study

The study aims to investigate the impact of microfinance banks in empowering women entrepreneurs in Imo State, Nigeria. The specific objectives are to;

  1. Assess the nature of microfinance banks’ services in women empowerment  in Imo State, Nigeria
  2. Examine the effect of microfinance banks’ financial advisory services on women empowerment  in Imo State, Nigeria
  3. Investigate the influence of microfinance banks’ financial  training services on women empowerment  in Imo State, Nigeria
  4. Evaluate the impact of microfinance banks’ credit saving  services on women empowerment  in Imo State, Nigeria



Microfinance institutions, women-owned firms, and the impact of microfinance institutions’ services on the development of women-owned businesses are examined in this chapter. The following subheadings are used to organise this chapter: the impact of micro-savings on the development of women-owned businesses; training services on women-owned businesses; theoretical analysis; empirical review; and a conceptual framework.

  Conceptual Review


When it became clear that traditional financial institutions could not help those with low incomes, the idea of micro-financing was born. Irish Loan Fund System, which granted modest loans with no collateral, is one of the first examples of micro-credit. Micro-finance has made its way around the globe, first to Latin America, then to Asia, and finally to Africa in recent years. In the 1970s, institutions like Bangladesh’s Grameen Bank, founded by microfinance pioneer Mohammad Yunus, laid the groundwork for the current microfinance business, which we now refer to as “microfinance” (Mwangi 2011).

The absence of a substantial segment of the population from conventional financial institutions, namely banks, fueled the growth of the microfinance movement in Nigeria in the late 1980s. Micro-finance evolved to fill the void created by banks in providing loans to people and small and medium-sized companies (SMEs). Ogindo.com (2018). Individuals and small and medium-sized businesses in Nigeria began to recognise microfinance organisations in the early 1990s due to the country’s expanding political and economic horizons. To aid the very or extremely poor in growing or starting their enterprises, microfinance is a development instrument that grants or offers financial services and products such as modest loans, savings, micro leasing, micro-insurance and money transfer. It is utilised chiefly in developing countries where small and medium-sized enterprises (SMEs) have limited access to traditional forms of financing. It may also be characterised as providing financial services to low-income consumers, including self-employed ones, as microfinance. Some financial institutions additionally provide insurance and payment services and savings and credit.

Entrepreneurship by women

New company creation is critical to economic growth and development, and women’s entrepreneurship has received growing attention in recent years (Acs et al., 1996; Langowitz and Minniti, 2017). Women’s entrepreneurship, in particular, is drawing the attention of policymakers and experts since it has emerged as a significant and unexplored source of economic development over the last decade. However, there is currently a shortage of data that shows the economic effect of female entrepreneurship in great depth. According to the Fourth World Conference on Women (WWC4), convened in Beijing in September 1995, it is critical to strengthen women’s business acumen. The conference’s Platform for Action established an action plan for promoting and supporting women’s entrepreneurship. It calls on governments and non-governmental groups, and international organisations to take concrete steps in this direction (UNIDO, 2015).

The micro and small business sector has grown in prominence in Nigeria. An alternate road to economic development is seen by Ikiara (2015) in the context of rising poverty and unemployment and economic changes that have resulted in economic liberalisation. Productivity and financial self-sufficiency are fostered through microbusinesses. More and more researchers recognise how important it is for any economy to have a diverse range of entrepreneurs and how important it is for women to have their businesses to express themselves and find pleasure in their careers (Verheul et al., 2018). (Eddleston and Powell, 2008). Due to a lack of women’s entrepreneurial aptitude and potential in many circumstances, these advantages are seldom used to their fullest potential (Baughn et al., 2018).

  Increase In The Number Of Nigerian Businesses Run By Women

In order to meet the goals of the MDGs and Nigeria’s Vision 2030, the growth of MSEs owned by women is essential. As a result of this competition’s growth, there will be a more significant number of Micro, Small and Medium Enterprises (MSMEs), an increase in sales turnover and profits and an increase in the total number of workers. Women are now launching new businesses three times higher than males, indicating a significant rise in female self-employment. Much emphasis has been paid to women’s engagement in self-employment and income-generating ventures, even if their businesses are smaller and less profitable (Keino and Ngau, 2015; McCormick, 1999).




According to Saunders, Lewis and Thornhill (2019:27), research methodology defines the research’s activity, proceeds, progress measured, and what constitutes its success. Research methodology is the end-to-end process the researcher follows to carry out the research study. It presents the process through which the researcher articulates the study problem and objective and then presents the study outcomes from the data analysis (Sileyew, 2019). It is also explained as a logical approach for collecting and interpreting data and analysing the findings (Sekaran and Bougie, 2016:50). Research methodology is a widely applied procedure for conducting research (Aaker, Kumar, Leone, and Day 2017:42). The research methodology chapter deals with the research approach, research structure, research procedure, the study scope, and data sources such as primary and secondary data. It also covers the study demographics, how the sample was determined, data collection approaches such as primary data collection methods, primary data collection methods, data scrutiny methods applied, analysing data, the internal consistency and rationality, and ethical considerations. To achieve the objectives of this study, a quantitative research method was applied, as this approach is most suitable to address the study objectives.


The study looks at the data collection procedures and the study’s theoretical foundations and paradigms in this part. The impact of microfinance banks in empowering women entrepreneurs in Imo state, Nigeria, is the focus of this research. This method works well because it examines the facts in a real-world setting while drawing on various data sources. As a result, this research aims to address the “how and why” questions about phenomena in their natural setting. To conduct this research, a case study methodology will be used. Predicated on the idea that it will allow for an exhaustive investigation of a specific situation while collecting and analysing data using various approaches, including observation and interviews, and obtaining confidential or community documents from other people, it has been deemed necessary.

Research Design

According to Mondofacto (2019), the study design is a technique for gathering data collected information. Identifying the instruments and procedures that were utilised to collect correct data, as well as how the instruments and data were assessed and guided, may be accomplished via study design. This research project aims to learn more about the external and internal elements that contribute to the long-term viability of Women Entrepreneurs. The variables in the study framework have been presented, and the best way to quantify their impacts is to use quantitative research methods. Cohen et al. (2000) stated that survey research uses scientific sampling and questionnaire design for measurement. Quantitative research, as mentioned by Pickard (2017), also offers an estimate of the population at large. To meet the study’s goals, data were collected using a cross-sectional design, which entails gathering data from a specific sample or population at once or at a single moment (Cavana, Dalahaye and Seltaran, 2015; Bichi, 2004). Respondents would be less likely to be unresponsive, it would take less time, and it would cost more money to do the research this way (Seltaran, 2017; Churchill, 1995; Wilson, 2010).

Study Population

Members of a well-defined class of people, events, and goals are considered members of the population (Ary, Jacobs and Razavich, 2020). An investigation’s results are based on the qualities of a collection of data gathered for the purpose (Sekaran and Bougie, 2010). The term “population” may also refer to the whole group of people, events, or concerns the researcher wants to investigate (Sekaran, 2000). Consequently, a sample is picked from the population, including all population units to which one wishes to generalise survey findings, such as people, families, or organisations (Dillman et al., 2017). According to Cresswell (2012), a population is a collection of people with the same traits and other characteristics that may be identified and studied by a researcher. According to the Small and Medium and  Enterprises Development Agency (SMEDAN, 2019), there are 1,296,386 micro-enterprises in Imo State. This serves as the population of the study.



The study investigated the impact of microfinance banks in empowering women entrepreneurs in Imo state, Nigeria. 385 (three hundred and eighty-five) questionnaires were administered to the respondents in different sectors in Glasgow, United Kingdom.   However, 325 questionnaires were retrieved and considered usable for analysis. The study achieved a response rate of 64.8%, which was considered sufficient based on Mugena and Mugena (2017), who assert that 50% is deemed suitable and sufficient for analysis.




In Nigeria’s Imo State, researchers looked at the impact of microfinance on the development of women-owned businesses. Research shows that microfinance services have a good and considerable impact on the development of female-owned businesses. Women entrepreneurs were all able to obtain microcredit facilities, although most strongly disagreed that the amount of money they received was enough. More than half of the people polled strongly disagreed that interest rates imposed by MFIs are reasonable.

Women’s entrepreneurship was the second purpose of the study, and the majority of respondents said that they had some savings with micro-financing organisations. More than half of the people polled believe that the MFI should have a minimum monthly savings requirement. The vast majority of people said that saving and withdrawing money was straightforward.

When it came to the final aim, most respondents had obtained financial, managerial, and advisory services training, although a small percentage had not. In addition, management training was shown to have the most significant impact on the development of women-owned businesses. Some financial education followed this, and then some mild investment advice.

Also essential and impacting the expansion of women-owned businesses were the study’s independent variables (access to credit, micro-savings, and training). According to the findings, a shift in the availability of loans to women-owned businesses would significantly impact their expansion. It was also shown that a shift in the way women save their money would impact the development of their businesses. Women-owned businesses will see an uptick in growth if training is reorganised on a more unitary basis. A substantial relationship between the dependent and independent variables (access to credit, micro-savings, and training) was found using the model’s coefficients of determination R square (growth of women-owned business enterprises, thus fulfilling the goodness of fit test).


According to the results, the expansion of women-owned businesses in Imo State may be attributed to improvements made by MFIs in microcredit, microsavings, and training/advisory services. According to the findings, women-owned businesses are more likely to expand when they have access to microcredit. According to the research, access to loan facilities from microfinance institutions positively impacts the development of women-owned businesses. Compared to the other factors, the availability of credit has the most vital link to expanding women-owned businesses. Training, investment advisory services, and microfinance institutions all positively impact the expansion of women-owned businesses. Although loan access was more remarkable than micro-savings, the association was more minor than it was for loan access. Although the correlation between micro-savings and the development of women-owned businesses was smaller than that between access to savings and training and investment advisors, it was significant.

Women-owned businesses in Imo State may also be attributed to the increase in micro-finance services. In line with Cooper (2012)’s results, microfinance services significantly influence the expansion of small and medium-sized businesses.


This evidence shows that microcredit services are readily accessible, but women entrepreneurs are unwilling to use them because of the high-interest rates and limited loans supplied by micro-financing companies. Consequently, financial institutions enhance the number of loans given to women-owned businesses to increase access to loans. Microfinance authorities should also have the policy to control the interest rates charged by MFIs.

MFIs should also encourage women to participate in training programmes in order to sharpen their abilities, according to the report. According to the findings of this research, the leaders of women-owned businesses need additional training and advice on investing.

Recommendation for more study

The research found that women-owned businesses benefit considerably from micro-finance services. The R-Square, a coefficient of determination, shows that the three independent variables in the model account for a significant portion of the increase in women-owned businesses, and the data corroborate this. Microcredit and training/advisory services have been shown to significantly impact the development of female-owned businesses. According to a new study, there should be more investigation into micro-finance services, like group savings, on women-owned businesses’ development.

One of Imo State’s distinct sub-counties studied was Imo State’s microfinance services for women-owned business development. Accordingly, further research of this kind should be carried out in additional sub-counties. In-depth research on women entrepreneurs’ underutilisation of microfinance services is also advised. The effects of microfinance institutions’ training and investment advising services on the development of women-owned businesses may also be studied in more depth.


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