Performance and productivity changes in microfinance banks in South-West Nigeria

• Main Authors: Musa Olasupo, Caroline Afolami, Adebayo Shittu, A.A.A. Agboola
• Format: Article
• Language: English
• Published: Firenze University Press 2014-07-01
• Series: Bio-based and Applied Economics
• Subjects: Microfinance banks; performance; Malmquist productivity index
• Online Access: https://oaj.fupress.net/index.php/bae/article/view/3263

The Nigerian Microfinance sub-sector is yet to attain the desired level of global best practice. This paper thus investigated the performance and productivity changes of MFBs in South-West Nigeria, from 2006 to 2010, having had the Microfinance Policy launched in 200. From the use of relevant accounting ratios, the study revealed that only 16% of the sampled MFBs met the recommended maximum PAR value of 5% in 200. It was also revealed that 31% of the sampled MFBs reported a debt/equity ratio above the recommended value of 2 in 2006, while 32% had gearing of over 2 in 2010. The Malmquist productivity index revealed that the MFBs experienced fluctuating performances in their productivity changes, with pure technical efficiency improvements in 2007 and 2009. Overall, the performance and productivity changes experienced by the MFBs depicted a sub-sector with huge potentials and hence require nurturing to achieve its goals.