Impact of Microfinance Banks on Business Expansion Capacity and Performance of Women Food Vendors in Futa Environment

Abstract

The purpose of this study was to examine the impact of microfinance on business expansion capacity and performance on women food vendors in Federal University of Technology, Akure, Ondo State, Nigeria (FUTA) environment as well as the factors that affect the performance of women entrepreneurs. For this purpose, data was collected from women entrepreneurs in FUTA environment. The findings show that there are various barriers that imitate against entrepreneurs’ development in FUTA environment. The major challenges involve, lack of collateral, high loan interest rate and lack of registration. Also, the study concluded that, micro entrepreneurs face a number of challenges. These include business risk, lack of education, family problems, high interest rate and lack of support. Despite the existence barriers for micro entrepreneurs in accessing microfinance services, among others, several Micro entrepreneurs have got their businesses growing. This suggests that there might be some factors or opportunities that have enabled some micro entrepreneurs to overcome the above-mentioned constraints and make their businesses prosperous. This could be because of their hardworking spirits, having understanding and supportive family members, required skills and technical knowhow obtained by being persistent in the business. Finally, the study concludes that lowering interest rate will improve loan provision to entrepreneurs in FUTA environment. It was established that microfinance institutions are skeptical in giving loans to not only very risky businesses but also new businesses. They are keen when assessing the creditworthiness of businesses while dealing with disproportionate information problems.