ABSTRACTThe thrust of this study is to evaluate the impact of Microfinance banks credit on Kaduna Stateand to examine the impact of Microfinance on the beneficiaries. The data utilized cross sectionaldata obtained through questionnaires administered randomly to six (6) operators, one hundredand eighty (180) questionnaires beneficiaries of microfinance banks’ credit facilities and onehundred and eighty (180) questionnaires non- beneficiaries of microfinance bank credit facilitiesrespectively.  The tools of analysis used are Descriptive Statistics, Paired sample t test techniqueand Double Difference (DD) estimator model.  The study reveals that (i) there is a significantdifference   (in   terms   of   income,   business   expansion   and   improved   profit)   in   the   number   ofbusinesses who use microfinance products than those that did not use Microfinance Credit. Thisstudy concludes that there is a significant relationship between Microfinance Credit and changein   income,   output   growth   and   general   welfare   level   in   Kaduna   State.   Therefore,   the   studyrecommends that the state government in partnership with the Central Bank of Nigeria shouldensure that Microfinance product should be combined with other development tools to leveragethe effect of Credit. Second, repayment should include a grace period with reasonable scheduleinstead of weekly payment period that is presently practiced among the microfinance banks inthe State.

 TABLE OF CONTENT

TITLE PAGE…………………………………………………………………………………..…iDECLARATION………………………………………………………………………………...ii

CERTIFICATION……………………………………………………………………………….iii

ACKNOWLEDGEMENTS……………………………………………………………………...   4  

TABLE OF CONTENTS………………………………………………………………………... v

LIST OF TABLES……………………………………………………………………………...   10   

LIST OF FIGURES……………………………………………………………………………… ABSTRACT………………………………………………………………………………………

CHAPTER      ONE:  INTRODUCTION……………………………………….……………..1

1.1  Background of Study……………………………………………………1

1.2   Statement of the Problem………………………………………………3

1.3 Research Questions ……………………………………………………..5

1.4  Objectives of the Study…………………………………………………5

1.5  Hypotheses……………………………………………………………..5

1.6  Significance of the Study……………………………………………….6

1.7 Scope and limitation of the study……………………………………..6

1.8 Organization of Study………………………………………………….6

CHAPTER      TWO:  LITERATURE REVIEW……………………..………………………7

2.1  Conceptual Framework………………………………………………..7

2.2  Theoretical Framework………………………………………………..11

2.3  Empirical Literature……………………………………………………18

2.3.1    An overview of various Economic Development Programmes……….30

2.3.2 Microfinance Role in Economic Development………………………..34 

2.3.2    Microfinance Policy and Development Framework………………….35

2.3.3    An Overview of the Structure of Microfinance Banks ………………36

 2.3.4  Transmission Mechanism……………………………………………..37

CHAPTER THREE:    METHODOLOGY……………………………………………………39

3.1  Study Area…………………………………………………………….39

3.2 Source of data…………………………………………………………39

3.3 Data Collection Techniques and Tools………………………………….39

3.4  Analytical Framework ……………………………………………….40

3.4.1  Descriptive Statistic.………………………………………………….41

3.4.2 Compare Means ………………………………………………………41

3.4.3  Paired Sample t Test…………………………………………………..41

3.4.4 Double Difference (DD) Estimator Model …………………………..42

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS OF RESULT………….45

4.1 Data Presentation ……………………………………………………..45

4.2 Impact of Microfinance Facilities on the Business of Beneficiaries….55

4.3 Identified Problem and Prospect of Microfinance Operators and Client.62 

CHAPTER FIVE:     SUMMARY, CONCLUSION AND      RECOMMENDATIONS……63

5.1  Summary…………………………………………………………………63

5.2 Conclusion ………………………………………………………………63

5.3  Recommendations ………………………………………………………64

REFERENCE …………………………………………………………………………………66

APPENDICES    A: Questionnaire non user of MFBs facilities (control group)…….……..72        

B: Questionnaire for user of MFBs facilities (experimental group)……….75       

 C: Questionnaire for operators of MFBs……………………………………78    

    D: Paired Samples Statistics for beneficiaries………………………………81   

E: Paired Sample Test for beneficiaries…………………………………….81    

F:  Paired Sample Test for beneficiaries (experimental group) and    non-beneficiaries (control group)……………………………………........82                          

  G:   One Sample t Test of Control group ……………………………… …….82    

H:  Income series for beneficiaries (experimental group)                                 non-beneficiaries (control group) of MFB……………………………83                           I: Abbreviations ………………………………………………………….84  

         

 LIST OF TABLES

Table 2.3.1.1 Various Economic Development Programmes ……………………….30

Table 4.1.1(a): Profile of User (customer) …………………………………………..46

Table 4.1.1(b): Table of User of Microfinance Facilities ………….……………..….47

Table 4.1.2: Profile of Non users of microfinance credit facilities……………..........48 

Table 4.2.1:  Legal and Ownership Structure of Selected MFBs, it’s Targeted                      Business and their Source of Funds……………………………...........50

Table 4.2. 2: Maximum Loan Tenor, General Rate of Interest, Minimum Loan                     Given and its Credit Methodology …………………………………….52                    

Table 4.2.3 Range of Product Offered by Microfinance Banks ……………..………53

Table 4.2.4: Target Beneficiaries of Microfinance Bank……………….……………54 

Table 4.2.5: Rate of Interest……………………………………..……………..…….55

Table 4.3.1: Selected MFBs and Business Activities of Beneficiaries……………....56

Table 4.3.2: Frequency Table of Annual Income of Beneficiaries before and after                       Accessing Loan from selected MFBs………………………………….58Table 4.4.1: Challenges and Problems of Microfinance Operators ………………….61Table 4.4.2: Challenges Faced by User/Customer of Microfinance Banks…………..63