IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v10y2019i3d10.1007_s13132-018-0527-z.html
   My bibliography  Save this article

Determinants of Microentrepreneurs’ Participation in Cowries Microfinance Bank (CMB) Programme in Lagos State, Nigeria

Author

Listed:
  • Adijat O. Olateju

    (Lagos State University)

  • Soo Y. Chua

    (Universiti Sains Malaysia)

  • Abdul Fatah Che Hamat

    (Universiti Sains Malaysia)

Abstract

Microfinance banks and microenterprises are important sectors that can enhance development in an economy, especially in developing economies where the level of poverty is often very high. This paper investigates the factors that influence microentrepreneurs’ (MEs) participation in microfinance programmes in Lagos State, Nigeria. The study used Cowries Microfinance Bank (CMB) as a case study bank. Socioeconomic characteristics of the MEs which are age, gender, marital status, educational level, business experience of the MEs, household size, membership of a political party and income were used as variables of measurement. Total samples of 550 MEs (participants and non-participants) were selected from the list of CMB’s clients, through a simple random sampling technique. The samples were further disaggregated into poor MEs (305) and non-poor MEs (245). These samples were estimated using a Tobit regression. The results of the Tobit regression indicate that the determinants of participation in the CMB programme for the poor MEs are gender, educational level, business experience, membership of a political party, household size, income and marital status of the respondents. The only variable that is not significant for the poor sample is age. On the other hand, for the non-poor MEs, the determinants of participation in CMB programme are age, membership of a political party, education and income of the MEs. Hence, CMB should consider the gender, educational level, business experience, membership of a political party, household size, income and marital status when giving out loans to the poor MEs. While for the non-poor MEs, the bank should consider the age, membership of a political party, education and income of the MEs when giving out loans to them. This will ensure that the loans are appropriately disbursed to those who are more likely to participate in CMB programme, thus making such programmes most likely to be successful in delivering benefits to microentrepreneurs.

Suggested Citation

  • Adijat O. Olateju & Soo Y. Chua & Abdul Fatah Che Hamat, 2019. "Determinants of Microentrepreneurs’ Participation in Cowries Microfinance Bank (CMB) Programme in Lagos State, Nigeria," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(3), pages 1114-1132, September.
    • Handle: RePEc:spr:jknowl:v:10:y:2019:i:3:d:10.1007_s13132-018-0527-z
    DOI: 10.1007/s13132-018-0527-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-018-0527-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-018-0527-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Syeda Rizwana Shah & Aqsa Tabassam Bukhari & Amara Amjad Hashmi & Sofia Anwer, 2008. "Determination of Credit Programme Participation and Socioeconomic Characteristics of Beneficiaries:Evidence from Sargodha," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 947-959.
    2. Imai, Katsushi S. & Gaiha, Raghav & Thapa, Ganesh & Annim, Samuel Kobina, 2012. "Microfinance and Poverty—A Macro Perspective," World Development, Elsevier, vol. 40(8), pages 1675-1689.
    3. Cuong H. Nguyen, 2007. "Determinants of Credit Participation and Its Impact on Household Consumption: Evidence From Rural Vietnam," CERT Discussion Papers 0703, Centre for Economic Reform and Transformation, Heriot Watt University.
    4. Anastasia Petrou & Irene Daskalopoulou, 2015. "Social Capital and Small Business Competitiveness: Evidence from Cross-Section Tourism Data," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 946-967, December.
    5. Essien, Ubon Asuquo & Arene, Chukwuemeka John, 2014. "An Analysis Of Access To Credit Markets And The Performance Of Small Scale Agro- Based Enterprises In The Niger Delta Region Of Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(3), pages 1-16, July.
    6. Andreas Lehnert, 2004. "Housing, consumption, and credit constraints," Finance and Economics Discussion Series 2004-63, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abera Alemu & Zerhun Ganewo, 2023. "Impact Analysis of Formal Microcredit on Income of Borrowers in Rural Areas of Sidama Region, Ethiopia: A Propensity Score Matching Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 65-85, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samuel Sekyi, 2017. "Rural Households' Credit Access and Loan Amount in Wa Municipality, Ghana," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 506-514.
    2. Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim, 2013. "Financial Crisis In Asia: Its Genesis, Severity And Impact On Poverty And Hunger," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(8), pages 1105-1116, November.
    3. Lucia Dalla Pellegrina & Giorgio Di Maio & Paolo Landoni & Emanuele Rusinà, 2021. "Money management and entrepreneurial training in microfinance: impact on beneficiaries and institutions," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 1049-1085, October.
    4. Michael F. Lovenheim & Kevin J. Mumford, 2010. "Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market Boom and Bust," Purdue University Economics Working Papers 1228, Purdue University, Department of Economics.
    5. Janine Aron & John Muellbauer, 2006. "Housing Wealth, Credit Conditions and Consumption," CSAE Working Paper Series 2006-08, Centre for the Study of African Economies, University of Oxford.
    6. Christopher D. Carroll & Misuzu Otsuka & Jirka Slacalek, 2006. "How Large Is the Housing Wealth Effect? A New Approach," NBER Working Papers 12746, National Bureau of Economic Research, Inc.
    7. Kamel Bel Hadj Miled & Moheddine Younsi & Monia Landolsi, 2022. "Does microfinance program innovation reduce income inequality? Cross-country and panel data analysis," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-15, December.
    8. Martin Farnham & Purvi Sevak, 2016. "Housing Wealth and Retirement Timing," CESifo Economic Studies, CESifo Group, vol. 62(1), pages 26-46.
    9. Daniel H. Cooper, 2009. "Impending U.S. spending bust?: the role of housing wealth as borrowing collateral," Public Policy Discussion Paper 09-9, Federal Reserve Bank of Boston.
    10. Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim & Aditi Gupta, 2012. "Financial Performance of Microfinance Institutions-A Macroeconomic and Institutional Perspective," Discussion Paper Series DP2012-04, Research Institute for Economics & Business Administration, Kobe University.
    11. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Crédito formal e informal de los hogares en Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Decisiones financieras de los hogares e inclusión financiera: evidencia para América Latina y el Caribe, edition 1, volume 1, chapter 5, pages 133-166, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    12. Rajbanshi, Ram & Huang, Meng & Wydick, Bruce, 2015. "Measuring Microfinance: Assessing the Conflict between Practitioners and Researchers with Evidence from Nepal," World Development, Elsevier, vol. 68(C), pages 30-47.
    13. Muhongayire, Wivine, 2012. "An Economic Assessment of the Factors Influencing Smallholder Farmers' Access to Formal Credit: A Case Study of Rwamagana District, Rwanda," Research Theses 198522, Collaborative Masters Program in Agricultural and Applied Economics.
    14. De Veirman Emmanuel & Dunstan Ashley, 2011. "Time-Varying Returns, Intertemporal Substitution and Cyclical Variation in Consumption," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-41, July.
    15. Akpan, Sunday B. & Udoh, Edet J. & Nkanta, Veronica S., 2023. "Agricultural Credit Policy and Livestock Development in Nigeria," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 23(3), September.
    16. Cull, Robert & Navajas, Sergio & Nishida, Ippei & Zeiler, Renate, 2015. "A New Index of the Business Environment for Microfinance," World Development, Elsevier, vol. 70(C), pages 357-388.
    17. Janda, Karel & Tran, Quang & Zetek, Pavel, 2014. "Vliv externího financování na mikrofinanční rozvoj - makro perspektiva [Influence of external funding on microfinance performance - macro perspective]," MPRA Paper 58166, University Library of Munich, Germany.
    18. Eva Sierminska & Yelena Takhtamanova, 2006. "Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons," LWS Working papers 4, LIS Cross-National Data Center in Luxembourg.
    19. Olga Gorelkina & Ioanna Grypari & Erin Hengel, 2019. "One strike and you’re out! The Master Lever’s effect on senatorial policy-making," Working Papers 201906, University of Liverpool, Department of Economics.
    20. Ali Raza, 2019. "Credit demand among small farmers: a district level approach, Pakistan," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 9(1), pages 47-61, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:10:y:2019:i:3:d:10.1007_s13132-018-0527-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.