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The Effect of Microfinance Credit on Poverty Index in Udi Local Government Area of Enugu State

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The Effect of Microfinance Credit on Poverty Index in Udi Local Government Area of Enugu State

Ik-Ugwoezuonu Lilian PhD1 & Obodoechi, Osita Betrand PhD2
1Department of Cooperative Economic and Management, Federal Polytechnic Nekede, Owerri, Imo State, Nigeria
2Department of Cooperative Economic and Management, Institute of Management and Technology, Enugu State, Nigeria

Citations – APA

Ik-Ugwoezuonu, L. & Obodoechi, O. B. (2023). The Effect of Microfinance Credit on Poverty Index in Udi Local Government Area of Enugu State. International Journal of Advanced Economics and Sustainable Development, 4(2), 14-23. DOI: https://doi.org/10.5281/zenodo.10212594
This study investigates the effect of microfinance credit on the poverty index in Udi Local Government Area of Enugu State, Nigeria. Microfinance institutions are established with the objective of providing loans, savings, and other financial services to individuals within the low-income and impoverished demographic on a sustainable basis, aiming to contribute to poverty alleviation. Secondary sources were utilized to collect data, and ordinary least square (OLS) regression analysis was employed for data analysis. The research findings highlight the substantial role of microfinance in the economy. Microfinance significantly contributes to poverty reduction by offering financial services to the economically disadvantaged at reduced interest rates, fostering employment generation, and supplying small loans to promote the growth of small businesses. The study concludes that the services provided by microfinance institutions play a pivotal role in poverty alleviation. Recommendations include the monitoring of interest rates by regulatory bodies to ensure accessibility to economically active poor clients, the provision of necessary infrastructural facilities by the government to enhance the output of micro-entrepreneurs, and the dissemination of microfinance policy information to increase awareness among interested individuals and small-scale enterprises, facilitating easy access to financial services provided by microfinance institutions.ABSTRACT
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Keywords: Microfinance Credit; Poverty Index; Udi Local Government Area; Enugu State

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