Microfinance is an effective way for the economic active poor to
increase their economic security and thus reduce poverty. This paper assesses
the impact of micro financing on the growth of micro and small entrepreneurs
in Southwest Nigeria. Data were sourced through questionnaires administered
to 198 MFBs in Lagos and Ogun State Nigeria. To achieve the objective of the
study a growth analysis was carried out using a loan demand model specified
and estimated using the Ordinary Least Squares (OLS) econometric technique.
Also, a linear Probability model was specified and estimated to measure the
log of odds of obtaining loans from the microfinance banks by the customers.
The study found out that the micro enterprises experienced positive percentage
change as well as positive annual sales growth as a result of micro financing.
Another interesting finding is that the enterprises owned by male microentrepreneurs
generate more employment than those owned by their female
counterparts while employment declined in the enterprises owned by those
with no formal education. The study recommends that MFBs should seek long
term capital from the Pensions and Insurance Companies in the country. This
will enable them grant larger volume of loan and to greater number of people
who will improve their outreach level
