Economic and Financial Review


K. O. Oji


Central Bank of Nigeria, Research Department.


Microfinance, Technological capability, Micro-borrowers, Micro-enterprises.


A study was conducted to determine the effects of Microfinance institutions’ (MFIs) policies on the technological capabilities of micro-borrowers in Nigeria. Nine (9) Microfinance institutions and 250 of their clients were surveyed in 2005 and 2006. The findings showed that between 2001 and 2005 there was significant growth in the clientele, savings, and loans made by the MFIs reflecting increasing demand for microfinance services. The regression results showed that the technological capability of micro-borrowers were affected by the number of employees/workers, duration of their loans, age of major machinery/ equipment of the enterprise, and the degrees of appropriateness of the machinery/equipment to workers’ skills, and available infrastructure. The operator’s length of experience, and interest rate on MFI loans negatively influenced technological capability. In order to encourage technology accumulation through micro-financing, the paper addresses an increase in the duration of clients’ loans, spreading the repayment over a longer period, and increase in the moratorium as well as introduction of low-interest loan products for technology acquisition by the MFIs.





Recommended Citation

Oji, K. O. (2008). Analysis of the effects of policies of microfinance institutions on the technological capabilities of micro-borrowers in Nigeria. Economic and Financial Review, 46(3), 1-28.



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