Reasons for low patronage of microfinance banks by women entrepreneurs in nigeria

Abstract

That microfinance banks are established to improve the socio-economic conditions of women especially in rural areas is a well-known fact, however in recent times, women entrepreneurs in Nigeria are no longer patronizing Microfinance banks like before. This calls for a research into factors responsible for low patronage of Microfinance banks by women entrepreneurs in South West Nigeria. The study employed Average Gross Turnover, Factor Analysis, Goodman and Kruskal’s gamma statistics to evaluate the effect of Microfinance banks on performance of women entrepreneurs and to determine the reasons for low patronage of Microfinance banks by women entrepreneurs. The result showed that weak but positive relationship exist between Microfinance banks and performance of women entrepreneurs. It was also observed that harsh loan recovery methods, high interest rates, short repayment periods and high charges imposed on customers are major reasons for low patronage of Microfinance banks by women entrepreneurs in Nigeria. It is recommended that Microfinance banks should reduce their interest rates drastically and lengthen the repayment periods so as to encourage women to patronize them more and to improve their performances.