INVESTIGATING MICROFINANCE SUSTAINABILITY OF ENTREPRENEURIAL INITIATIVES AMONG WOMEN BORROWERS

INVESTIGATING
MICROFINANCE
SUSTAINABILITY OF
ENTREPRENEURIAL
INITIATIVES AMONG WOMEN
BORROWERS
Chinwe R. Okoyeuzu
Department of Banking and Finance,
University of Nigeria, Nsukka.
chinwe.okoyeuzu@unn.edu.ng
ABSTRACT
Microfinance has been acknowledged as an
important tool towards poverty reduction.
This recognition is same in both developing
and developed countries. It is believed that
microfinance is a strategy for creating jobs
and thus, has been embraced by many as a
measure to increase employment levels in
their various countries. Basically, most poor
entrepreneurs are denied access to small
loans. Microfinance grants small loans to
underserved entrepreneurs and their
microenterprises. This opportunity would
then help them realize growth opportunities
Accounting and Finance Research Association
by starting or expanding businesses, thus
spurring employment. The population of
women employed are by far lower than men.
Microfinance as a policy should therefore
target the women as it was expected to
improve women empowerment through
increasing their bargaining power and gainful
employment. Although the importance of
microfinance cannot be overemphasized, it is
important to note the drawbacks associated
with the policy. Women face a lot of barriers
due to their gendered role in the society.
Roles such as being home keepers or being
restricted due to some cultural practices
compels them to be less risky and follow
traditionally accepted business modes, rather
than making big headway. Their habitual
poverty situation makes them more risk
averse, which is no doubt conservatively a
rational strategy on their part. Under these
embedded
socio-economic
conditions,
microfinance might help the borrowers to
avoid the abject poverty trap but cannot
sustain their growth in the longer term. The
latter would have been possible only if
microfinance modalities could harvest
human, as well as psychological capital
among the poor to opt for riskier, but high
return ventures. Looking forward, if
microfinance model is to be a motivator for
entrepreneurship, certain modalities need to
be addressed. The areas of enterprise
creations should be chosen prior and with
appropriate and socially acceptable training
and capacity building. The borrowers must be
equipped to bear the risk, psychologically
and financially. This would ensure that
sustainable long term growth is aimed at.

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