Effect of Microfinance Institutions on Rural Households’ Well-being in Oyo State: Case Study of IFAD/RUFIN Supported Project
In many developing countries, including Africa, rural dwellers often lack access to financial support because of inadequate infrastructure a-nd pro-urban banking systems. This situation may be overcome where micro-finance systems are introduced. A system of microfinance usually signifies a financial arrangement designed to help the rural poor transformtheir economic condition. Microfinancing can also be viewed as a means to transform rural economic, environmental and social development by empowering communities to find their own solutions to their developmental needs. This study assessed the role played by the Rural Finance Institution Building Programme (RUFIN) in the capacity building of micro-finance systems in Nigeria and the Village Savings and Credit Group with a view to making credit available to rural groups and also measuring the impact it has had on beneficiaries’ socio-economic wellbeing. The study provides an analysis of the patterns of empowerment using the sustainable livelihood framework to measure the impact of microfinance on the beneficiaries in three local government areas of Oyo State over the six-year period of intervention. Data was collected through interviews and the administration of structured questionnaires. The data was analysed using descriptive and inferential statistical techniques. Findings reveal the significant effect of microfinancing on the well-being of the beneficiaries compared to non-beneficiaries. The study also profiled and recommended changes needed in microfinance schemes, including women’s access to loans.
Keywords: Microfinance, Well-being, Livelihood, Gender, Sustainability