Open Access
American Research Journal of Business and Management
ISSN (Online): 2379-1047
DOI: 10.46568/arjbm
Microfinance Institutions’ Credit Strategy and Economic Development – Accountants Perspective
1Bursary Unit, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria
2*Registry Unit, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria
FABINU, Idris. Babatude, MAKINDE, Kazeem. Olajide, Folorunso Akeem Olalekan. “Microfinance
Institutions’ Credit Strategy and Economic Development – Accountants Perspective.” American Research Journal
of Business and Management. 2018; 4(1): 1-11.
Abstract
Economic development is an important issue in the 21st Century. The attention has therefore being
focused on microfinance institutions and their contributions towards economic development. The main
objective of this paper is to sample the opinion of professional accountants on the contribution of Microfinance
Institutions credit towards economic development in Nigeria. The study proposes some credit strategies to be
adopted by MFIs for them to be able to contribute meaning to the development of the economy. The population
of the study comprises of accountants in Ogun State Nigeria, upon which they were stratified in to three (3)
strata (sector), viz, Accountants in the Public, Private and Industry sector. One hundred and eighty-four (184)
of the population constituted the sample size selected through convenient sampling across each stratum. A
combination of descriptive statistics and multiple regression analysis were used to analyze the data collected.
The study revealed that credit subsidy by relevant arms of government (0.604) was found to be significant at 1%
with a coefficient value of (3.455). This implies that credit subsidy as an adopted credit strategy influence the
level of output of economically active individuals and SMEs. Thus, the more MFIs adopt the use of credit subsidy
as a credit strategy the likelihood the effect of economy is being suppressed. Other significant parameters are
Sourcing for external funds (0.127) significant at 1%, training on proper utilization of credit facility (.035)
significant at 10%. The implication of these is that as beneficiaries are trained on the utilization of credit, the
less likelihood would the effect of GDP growth be observed. In all, credit subsidies, sourcing for external funds
by MFI and training on proper utilization of credit beneficiaries was all found to influence the output of MFI
activities as a credit strategy for economic development. The study therefore, recommends that, accountants
and Managing Directors of various MFIs should adopt the credit strategies propounded in the study for them to
be able to contribute meaningfully towards government efforts and economic development at large.
