An Investigation of Activities of Microfinance Banks as a Veritable Tool for Reducing Poverty and Unemployment in Developing Economies: The Evidence from Nigeria

This paper aims to present a microfinance policy framework for Nigeria that would enhance the provision of diversified microfinance services on a long-term sustainable basis for the poor and low income groups residing in the country. It states that a microfinance policy framework which recognizes the existing informal institutions and brings them within the supervisory purview of the Central Bank of Nigeria (CBN) would not only enhance monetary stability, but also expand the financial infrastructure of the country. The paper suggests that the framework would also help meet the financial requirements of micro, small, and medium enterprises. It covers the following sections in detail:

• Overview of microfinance activities in Nigeria;
• Overview of unemployment and poverty reduction in Nigeria;
• Justification for the establishment of microfinance banks;
• Microfinance policy and goals with a focus on policy objectives, policy targets, policy strategies, and goals of microfinance banks;
• Ownership of microfinance banks and framework for the supervision of microfinance banks;
• Corporate governance of microfinance banks;
• Nature of socio-economic dimension of poverty and unemployment rate in Nigeria;
• Challenges faced by microfinance banks in the country and key recommendations for developing an appropriate microfinance policy.