Effect of access to microfinance services on the performance of microenterprises in Abia State, Nigeria

Abstract

The study examined the effect of microfinance services on the performance of microenterprises in Abia State, Nigeria. A total of 240 entrepreneurs were randomly selected, with 120 being beneficiaries of microfinance services and 120 not being beneficiaries. Data were collected using a structured questionnaire and focused group discussions. The data collected were then analyzed using descriptive statistics, logit regression, and the double difference estimator. The result showed that the majority of beneficiaries (55%) and non beneficiaries (72%) were male, and married. The respondents were generally young, with a mean age of 40 and 44 years, and had a high level of education, with 82% being literate. Moreover, 69% of the respondents had a large household size. Microfinance services were accessible to all individuals with business interests, with the beneficiaries having more access. Most of the beneficiaries (97%) met the criteria for accessing microfinance services. The study also found that microfinance services improved the performance of both beneficiaries and non beneficiaries, with a performance difference of N 15,002.00. The study recommended that priority should be given to male, young, married, educated, and cooperative members with business experience in credit selection, to ensure effective use of microfinance services and to boost entrepreneurial activities. Additionally, the study suggested that microfinance institutions should consider locating their offices in areas that promote business and improve access to their services. Furthermore, the operators of microfinance institutions in the state should strictly adhere to the criteria for accessing microfinance services to maintain financial standards and include genuine clients.