Welcome to PROJECTSRESEARCH.COM. Download Your Latest Project Topics and Materials For Undergraduate and Post Graduate Students. Hire Experienced Project Writers For Your Final year Projects and Dissertations. Instant Delivery. 24/7 support. Courses: Student Proposals, Business Plans.






It is an undisputable fact that the contributions of microfinance in entrepreneurship activities are increasing, being recognized as a primary engine of economic growth. By combining existing resources with innovative ideas, entrepreneurs add value through the commercialization of new products, the creation of new jobs and the building of new firms. It is observable that nations with higher levels of entrepreneurial activity enjoy strong economic growth. In short, entrepreneurs are the link between new ideas and economic development. This is proper using the experience of the industrialized countries of North America and West Europe. Legislative action has been taken by countries like United States of America, the Netherlands and Japan, to see how entrepreneurial activities can contribute to economic development. This may explain why various governments around the world promoted it since entrepreneurial skills and strategies are used to tackle different social problem and addressing poverty as well as a means of employing the disadvantaged.

Speaking at the conference with a theme “Improving Access to Microfinance”, Soludo (2008) revealed that in order to sustain increasing participation of skilled entrepreneurs in the credit and other financial service delivery to the micro, small and medium enterprises in the microfinance sub-sector, Central Bank of Nigeria (CBN) is forging ahead in its determination to develop a pool of articulate and well focused entrepreneurs through setting up one Entrepreneurship Development Centre (EDC) in each of the six geo-political zones in the country. Soludo (2008) further stated that to access microfinance by the economically active poor and low income earners in Nigeria is a collective responsibility for the achievement of the Millennium Development Goals (MDGs); He added that it provides a strong focus on macro-economic stabilization, especially in the pursuance of massive trades and investment liberalization program to encourage entrepreneurial capacity to develop business and for the business to succeed.

The global importance of Microfinance Institutions in poverty reduction, grass root business financing has created a compelling need to design strategies for providing financial service to the vulnerable, poor and low income group on a sustainable basis. Owing to the peculiar condition of the poor, these services were originally provided at subsidized rates through non-governmental organizations and self-help groups by donors and government. This research intends to contribute to the array of literature written by different scholars on Microfinance and entrepreneurship development. Entrepreneurship in Nigeria has the tendency to serve as sources of livelihood to the poor, create employment opportunities, generate income and contribute to economic growth. Despite its increasing roles, its accessibility to credit remains one major constraint.

Microfinance is a form of financial development that has its primary aim to alleviate the poverty of the poor who are generally remained un-served or were offered improper financial service. Bank and other financial institutions are currently estimated to provide services to only 25% of potential clients worldwide. This was cited by Mohammad (2007) he is of the opinion that only 2% of micro entrepreneurs are being provided service by banks. However, government at all levels recognized the need to encourage the small enterprises through the provision of credit schemes and policy reforms which brought about the emergence of Micro Finance Banks the Federal Government of Nigeria introduced during the Obasanjo regime to replace the formal community Bank in Nigeria which became operational in 2005.

Nigerians in line with their governments acknowledge the need to alleviate poverty and encourage entrepreneurship, through the provision of credit and inform policy reforms with respect to bringing the Microfinance Banks under the supervision of Central Bank of Nigeria to create enabling environment for entrepreneurs’ access to small loans.  More so, to ensure that the mission of the policies were achieved, which include ensuring that the majority of the active population are reached with financial services, and that total credit as a percentage of Gross Domestic Product (GDP) ratio increase steadily, as well as micro credit as a percentage of total credit to the economy. Equally important was the need to improve access of poor active most especially women to microfinance on a consistent basis (UNECA, 2005).

According to Peter (1990), entrepreneurship has enormous employment potential, politicians see it as a key strategy to prevent rural unrest, farmers perceive it as an instrument for improving farm work, and women regard it an employment possibility near their homes which provides autonomy and independence and reduce the need for social support. However, studies made on entrepreneurship development globally have addressed it as an instrument to overcome poverty and generate wealth. In modern economy, entrepreneurship is the driving force of economic growth under capitalist oriented economy. Indeed there can be no capitalist development without entrepreneurial class. McNamara (1969), agrees with the view, in his presidential address to world bank that: Economic development required financial resources. Indeed it require far more than have yet been available. However, the resource it requires most is creative innovation. Entrepreneurship development is one of the major components to build capacity for sustained economic development.

 The term entrepreneurial development has been defined in various dimensions (Ndechukwu, 2001, McOliver, 1998, Ameashi, 2006). However referring to the productive transformation of an entrepreneur, a single thread runs through all of them: the ability to identify business opportunities, the ability to be able to harness the necessary resources to use opportunities identified, the ability and willingness to initiate and sustain appropriate actions towards the actualization of business objectives. Entrepreneurship Development is the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programs. Entrepreneurship Development aims to enlarge the base of entrepreneurs in order to hasten the pace at which new ventures are created. This accelerates employment generations and economic development. Entrepreneurial development 'focuses on the individual who wishes to start or expand a business. Furthermore, entrepreneurship development concentrates more on growth potential and innovation. Essentially this means the acquisition of skills that will enable an entrepreneur to function appropriately and adequately in terms of:

·        Attaining present result based on previous decisions and planning for the future, based on present circumstance.

·         Maintaining and developing the organized capability which makes achievement possible, and

·        Coordinating the specialist functions that should enable a firm to perform the technical task in marketing, personnel, research and development, manufacturing, finance and control, especially in the face of changing technology and dynamic industry trend.

To perform these functions, the entrepreneurial development process, procedures and skill acquisition must entrench certain skills. These include conceptual skills, human skills and technical skills, which will transform the entrepreneur into a taskmaster, mediator and motivator. It is the purpose of this study to examine entrepreneurial development and also analyze the government interventionist Agencies established to encourage the development of entrepreneurship in Nigeria. That entrepreneurial development depends on three entrepreneurial skills, which affect positively the strategic management and development of entrepreneurial organizations in Nigeria.


1.2             STATEMENT OF PROBLEM

The Federal Government of Nigeria (FGN) has been adopting monetary, fiscal, industrial and developmental policy measures at the macro level to facilitate and support entrepreneurial activities and at the same time specific financing arrangements are being made in respect of funding programs at the micro level to boost entrepreneurship activities in Nigeria. The community banking system is one of such programs introduce by decree 46 of 1992 (as amended) to finance and support the growth of entrepreneurship in Nigeria. This microfinance banking system is evidently fraught with problems as regards to its ability to finance projects in rural (and even semi-urban) communities. Some of the reasons include;

       i.            Inadequate infrastructures.

     ii.            Inadequate banking culture in the rural areas and among the urban poor is another problem militating against microfinance banks to entrepreneurship development.

  iii.            The failure of many community banks and the withdrawal of the license of 224 microfinance banks in 2010 have badly damaged the confidence on the banks.

   iv.            Unfavorable and frequent change in government policies.

     v.            Limited fund/budget: This limits the capability of the microfinance banks to fund large number of entrepreneurs.

 This research therefore, aims to make a close evaluation of the impact of microfinance on the development of entrepreneurial activities in Jos North Local Government Area of Plateau State, with special reference to some small scale entrepreneurs.


1.3             RESEARCH QUESTIONS

The major problems which this research work aims to evaluate are captured in the following research questions;

       i.            What is the relationship between microfinance banks to the entrepreneurial development?

     ii.            What problems militate against the effective financing of entrepreneurs by the microfinance banks and the attainment of their objective?


1.4             OBJECTIVE OF THE STUDY

Based on the research questions above, the specific objective seeks;

       i.            To identify the relationship between microfinance banks and the development of entrepreneurial activities in Nigeria.

     ii.            Identify problems that militate against the effective funding of entrepreneurship development (apart from finance).



The importance of this study lies in identifying the various problems that have bedeviled the effectiveness of the microfinance banking system. More so, the study will add to knowledge on how Nigerian policy makers can grow the economy through their support on entrepreneurship development in Plateau State. Examination of the impact of microfinance banks on entrepreneurship development in Plateau State will reveal to a large extend why there has been decline in industrial output in recent years. This study will enable the government get to know the problems facing entrepreneurship especially in the areas of finance banks and realize how difficult the porches is, and device a measure to solve the problems. Through this study, the government will consequently be able to know how to uplift the status of microfinance banks.

Secondly, this study will be relevant to other researchers because it will enable them to look into other related areas of study, which this could not cover. The significance of this study enables the researchers widens their scope of knowledge in microfinance banks financing of business.



Hypothesis are sets of assumptions formulated by the researcher , accepted or rejected personally on the basis of research findings, (Agburu 2001). The hypothesis is tested in the course of this research work is stated strictly in their null forms as follows;

          H₀:    Microfinance banks have no relationship with entrepreneurship development.

H₁:     Microfinance banks have relationship with entrepreneurship development.


H = Null hypothesis

H = Alternative hypothesis

Both hypotheses are complementary.






This research is carried out in order to ascertain the relationship between microfinance and entrepreneurship development. To achieve the objective of this research work, primary data will be used through the designing and administration of questionnaires to some selected entrepreneurs in Jos North Local Government of Plateau State.

          The chi-square ( ) test of independence is used in analyzing the data. The formula for chi-square can be expressed as;


  = Summation

Fo =  Obverved Frequency

Fe =  Expected Frequency


1.8                      SCOPE AND LIMITATIONS

             This research work centered on the impact of microfinance banks on entrepreneurship development in Nigeria. Owing to the fact that there are 36 states in Nigeria and it will be burdensome to study all of them; therefore, Jos North Local Government of Plateau state is the selected sample to cover all other States of Nigeria. The range of data to be used for this study is limited to the period of 2007 to 2015. This is to enable the researcher access the most current information on the issue under consideration.

             The study is limited by a number of factors which includes; finance, time and availability of data. Many small business owners hardly keep records and most are not willing to disclose their operations to the public. These limitations usually arise in the study.

Get Full Project

Pages: 56

Chapters: 1-5 (Complete) 

Format: MS-Word

Post a Comment

Please Select Embedded Mode To Show The Comment System.*

Previous Post Next Post