International Journal of Management and Business Studies

International Journal of Management and Business Studies Vol. 1(1), pp. 001- 007, December 2011 © International Scholars Journals (Manuscript Number: IJMBS-11-050)

Full Length Research Paper

Determinants Of Microfinance Outreach In South-Western Nigeria: An Empirical Analysis

Osotimehin, K.O. (PhD), Jegede, Charles.A (PhD),  Lecturer I, Akinlabi, Babatunde Hamed (MSc) Associate Lecturer

Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife, Nigeria.

Department of Accounting and Finance, Lagos State University, Ojo, Lagos, Nigeria.

Department of Business Administration and Management, Lagos State University External System, Ojo, Lagos, Nigeria.

Received December 18, 2011; Accepted December 27, 2011

Abstract 

The study investigated microfinance institutions’ outreach in South-western Nigeria. Specifically, it examined the determinants of microfinance institutions outreach. The study employed secondary annual panel data collected from 80 microfinance institutions in Lagos and Ondo States over a period of six years from 2005 to 2010. The study employed Generalized Least Squares Method to examine the determinants and trend of outreach of microfinance institutions.  Pooled Ordinary Least Square Method was also employed to analyse the relationship between determinants of outreach of the sampled microfinance institutions. The study find that microfinance outreach is positively and significantly determined by average loan size, debt-equity ratio, loan repayment rates and salaries. Therefore, microfinance institutions are encouraged to increase their outreach by providing relatively small loans. The small loan sizes can reach more clients and therefore achieve a greater outreach.

Keywords: Microfinance; determinants; trends; outreach, south-western Nigeria