Microcredit and Poverty Alleviation in Nigeria in COVID-19 Pandemic

Abstract

Microcredit is a financial service whose importance is often understated. When lack of access to microcredit is exacerbated by a public health emergency such as the COVID-19 pandemic, its real significance as an essential service in poverty alleviation becomes more apparent. The outbreak and spread of the novel coronavirus (COVID-19) has led to dramatic transformations of every sector of the Nigerian society including microcredit delivery system, where formal and informal actors co-exist often in an uneasy relationship. Unfortunately, strategies for inclusive microcredit delivery before and during the COVID-19 pandemic are lacking in Nigeria, fuelling the further exclusion of informal sector in microcredit governance and policy process in Nigeria. The paper reviews the state of the COVID-19 pandemic in Nigeria and identifies policy gaps in microcredit delivery and governance mechanism. The study also highlights the linkages between COVID-19 and microcredit in poverty alleviation with a view to catalysing increased and inclusive access to microcredit and sustainability policy in Nigeria. It is argued that acknowledging the role of microcredit in informal economy and poverty alleviation is the critical first step towards framing a sustainable microcredit policy in which primary stakeholders are involved.

Impact of COVID-19 on the Income of Entrepreneurs Who Borrowed from SHG

“…This is akin to Marx’s idea of power within a group of people with common economic interests (Marx, 1996). Microfinance became the baton for female entrepreneurs supported by self-help organizations to overcome the epidemic’s doom, especially from a feminist stance (Armendariz & Morduch, 2010; Gopal & Malliasamy, 2022; Neely & Carmichael, 2021; Onuka, 2021; Pitt & Khandker, 1998). Microfinance in the form of SHGs allowed small entrepreneurs to get loans without physical collateral by utilizing social capital, trusts and relationships (King & Levine, 1993; Maclean, 2010; Morduch, 1999; Weber, 2004).…”

Financial management of the Savings and Credit Cooperative in periods of uncertainty

“…En este contexto, las entidades del sector micro financiero desempeñaron un rol de notable importancia y protagonismo [13]. Brindaron acceso y atención crediticia a sectores con menores recursos económicos y que, por lo general, no están incluidos dentro del sistema financiero tradicional, permitiéndoles solventar sus necesidades financieras en medio de la crisis [14].…”

Board attributes and CSR expenditure before and during COVID-19

“…This study used the case study of Nigeria because the instantaneous impact of the pandemic in the country has aggravated the poverty condition (Onuka, 2021a(Onuka, , 2021b. In other words, this study used a case study of Nigeria because the COVID-19 pandemic has greatly damaged the socioeconomic development in the country (Umar and Danlami, 2021;Umar et al, 2022b).…”

“…In other words, this study used a case study of Nigeria because the COVID-19 pandemic has greatly damaged the socioeconomic development in the country (Umar and Danlami, 2021; Umar et al , 2022b). The pandemic has made poverty more complicated due to its multifarious effects on the lives of the masses in Nigeria (Onuka, 2021a). Thus, the impact of COVID-19 contributes to ingraining the country’s challenges, such as low quality of education, poor health care and poor road networks making it difficult to achieve the SDGs by the year 2030 (Fagbemi, 2021).…”