PUBLIC POLICY AND GRASSROOTS DEVELOPMENT INITIATIVES. A REVIEW OF MICROFINANCE BANK IN NIGERIA.

Abstract

The paper examines the impact of public policy on microfinance in Nigeria as a major prerequisite for promoting grassroots development. To this end, it articulated some research questions and leveraged the secondary sources of data such as online journals, industry report amongst others to analyse the issues. The findings reveal that progress has been made in cutting down financial exclusion rate in the country since the launch of the microfinance policy, regulatory and supervisory framework in 2005. However, there remains a gap to be bridged in terms of realising the target of reducing the exclusion rate of adult citizen to 20% set in the National Financial Inclusion Strategy which elapsed in 2020. The finding also identifies inadequate Supervision by the Central Bank of Nigeria, inadequate funding, high risk and heavy transaction cost and low technical skills in microfinancing as major factors affecting the financial inclusion drive of microfinance banks in Nigeria. To beat the odds, the paper recommends that there is need to streamline the regulatory structure, strengthen capital standards and build adequate capacity of microfinance banks employees.