Impact of Informal Microfinance on Rural Enterprises

Abstract

The paper set out to examine if rural enterprises that participate and patronise informal microfinance providers are also finding it difficult to grow their business activities.The respondents were classified into two groups loan and no loan members. This study made use of primary data through the use of impact survey questionnaire administered on 302 business owners in rural areas who are members of cooperative societies and their responses were analysed using cross tabulation analysis, means, pearson chi square test and independent sample t-test. The findings show that members who had access to loan improved their businesses significantly through expansion of business facilities, addition of new products and hiring of more workers more than those without loan.

Keywords: Microfinance, rural enterprises, cooperative, poverty