Performance Analysis of Micro-Finance Banks on Women Entrepreneurs in Oyo State, Nigeria

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INTRODUCTION

In many economies of the world, there are only few large enterprises, followed by a large number of medium enterprises, whereas small businesses dominate the economic landscape of most countries (Kessy and Temu, 2010; Benzing and Chu, 2009; Tarmidi, 2005). This is a common structure in most developing economies including Nigeria. Nigeria has many small businesses which engage a significant proportion of the working population both in the rural as well as the urban area, Small businesses are also mostly engaged in by women who no longer stay home as full-time housewives. They offer affordable goods and services and engage a good proportion of the populace.

In view of the foregoing and due to the recent economic troubles all over the world there has been more written about small business growth than any other aspect of management. One of the main reasons is the contribution of expanding enterprises to economic development and unemployment reduction, which, generally, has attracted the attention of researchers and policy makers in many countries (Bernice and Meredith, 1997). The existence of a strong small business sector is necessary for the boosting of the economy. In a related development, women are seen to play a crucial role in the economic development of their families in particular and the communities at large though these roles remain mainly unsung. A misleading remarkable feature of the history of the technological development is the invisibility of women; whereas only the scientific breakthroughs of men were recognized and recorded. Women are generally considered to be at the lowest run of the ladder in Nigeria. Evidence from literature supports that women are part of the missing link in the development quagmire, confronting the least developed economies to which Nigeria belongs (Eneh and Nkamnebe, 2011). This assertion is buttressed by the fact that women account for over half of the food produced in the developing countries, consists of the fourth of the industrial labour force in addition to fetching most of the household's water and fuel wood and being responsible for children and household chores (Anyawu, 1994). Despite all these crucial roles, it is however discovered that women entrepreneurs have low business performance compared to their male counterparts (Akanji 2006)

This is further corroborated with the findings of Berger (1986) who reported that most of the petty trading activities operated by women do not yield sufficient income to raise women out of poverty. On the average, women entrepreneurs are found to have lower sales revenue, fewer assets, smaller profit margins and lower likelihood of survival than men enterprises and this is caused by factors which affect entrepreneurial performance such as lack of credit, savings education or training and social capital (Shane, 2003). Literature supports the fact that women entrepreneurs in developing countries do not have easy access to credit (Ibru, 2009; Okpupara, 2009), whereas the rate of women participation in the informal economy is higher than males (Akanji, 2006; Akinyi, 2009), lack of capital to start or fund their businesses led them to request for credits from micro-finance institutions (Kuzilwa, 2005, Ibru, 2009).

This calls for women's economic, social and political empowerment but this can't be achieved without the provision of business finance for the growth and development of women owned enterprises, therefore making it imperative for the Federal Government of Nigeria during the Obasanjo regime in 2005 to introduce the Micro finance banks in order to replace the former community banks. This was established to fill the gap created by the formal financial sector by improving the socio-economic condition of the poor and their income generational activities. Micro-finance is the provision of uncollateralized credit for enterprise development and growth of the poor who are snubbed by the commercial banks as a high risk group. …