Microfinance, Financial Inclusion and Social Entrepreneurship

AFRAG062

Microfinance, Financial Inclusion and Social Entrepreneurship

Onigah Peter Oko Department of Banking and Finance, University of Nigeria, Enugu Campus

Abstract

Small and Medium Enterprises all over the world play a strong role in national development. Microfinance services (microcredit, micro savings and micro insurance) help bridge the gap between poor households and formal financial services by smoothing cash flow, particularly in times of shock and building assets. This is attributed to the massive employment opportunities created for the citizenry of the country where SMEs exist, income generation and reasonable contribution to national outputs. Our times, the SMEs were not well served by conventional banks. Micro investors and entrepreneurs were almost excluded. Hence, there is a need for financial

inclusion through micro financing. Financial inclusion is about improving accessibility to financial products for all people, whatever their situation. The first thing most financially excluded people lack is financial education. They also lack access to finance itself – that’s where microfinance comes in (Soludo, 2010). Financial inclusion is often associated with emerging countries, but we also have a focus on our domestic markets. As a result of the recognition accorded Micro investors and entrepreneurs, the Nigerian government established microfinance banks in the year 2007 to serve as mechanisms for financial sources for various Small and Medium Enterprises. While some in literature noted that encouraging financial inclusion through supporting the activities of SMEs will help the country to achieve social entrepreneurship, others are against. There are divided opinions in literature on the relationships among Microfinance, Financial Inclusion and Social Entrepreneurship in Nigeria. Therefore, this study which focused on Microfinance, Financial Inclusion and Social Entrepreneurship was necessary.

Purpose: The purpose of the study was to unveil the relationships connecting Microfinance, Financial Inclusion and Social Entrepreneurship in Nigeria.

Methodology: Expository research method was employed to explain the responses from interviews of selected small and Medium Enterprises in Cross River State. Result and Conclusion: The results show that there exist significant relationships among Microfinance, Financial Inclusion and Social Entrepreneurship in Nigeria. This study advocates the need to achieve Social Entrepreneurship and financial inclusion through supporting the growth, expansion and survival of small and Medium Scale Enterprises in Nigeria through micro financing.

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