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Microfinance, which is one of the tools used in poverty alleviation, has been with us
since time immemorial. In Nigeria it is traditionally rooted, while providing credit and
financial services to the poor or low-income earners. There are people with self-help
groups, rotating savings and associations with several activities aiding members to come
out of poverty etc. Microfinance however, is been implemented to overcome the failure
of the formal banking industry at offering small loans for the poor to enable them
perform some income generating activities. The question of ‘whom does the
microfinance benefit’, and how it affects the welfare of different groups of individuals
and household was tackled in this study. This was achieved through studying the impact
of micro financing on a group of women – Obazu Progressive Women Association,
Mbieri, Owerri in Nigeria involved in poverty alleviating activities for their members.
From the findings of this study, the microfinance intervention has a positive impact on
alleviation of poverty among the women of this association. Interestingly, this study
found that most women in this association experienced increased income and therefore
improved their economic status, political and social conditions after receiving the loans.
This result therefore further upholds the main purpose and objectives of microfinance in
1.1 Problem area
Microfinance is created in response to the missing credit market for the poor. In the
developing countries most recently for instance, governments are also incorporating
microfinance in their strategies towards achieving the Millennium Goals that involves
halving extreme poverty by the target date, which is 2015. Given the complex nature of
poverty together with the current Microfinance intermediation approach, it is however,
becoming increasingly difficult to judge whether such programs should be advocated as a
means of poverty alleviation.
This study investigates the hypotheses that: Microfinance programs alleviate poverty by
increasing income, changing economic status and empowering women socially and
politically, and by empowering them in Obazu Mbieri, Owerri.
1.2 Problem and aim
For a strategy to be viable, it should have a positive impact on what it is up to do.
Consequently, viability of MF can be measured in terms of its actual impact on the
intended beneficiaries, who are assumed to be ‘poor’. The focus is on this area ‘Obazu
Mbieri, Owerri’ to delimit my work and due to time constraint. I then chose the main
research question ‘whether credit (loans) and saving scheme is a viable strategy to
alleviate poverty in Obazu Mbieri, Owerri’.
In order to investigate this subject, two sub-questions were formulated:
1. Whether NGO’s can use the credit and saving scheme to make a
difference in alleviating poverty for women?
2. Can Microfinance programs owned and implemented by local MF
institutions alleviate poverty?
The problem of poverty among rural women in Obazu community is a big issue that
needs to be explored. It is not good for people to live in poverty rather they should live a
good life which is above poverty line. This study is important in order to investigate the
activities of these rural women living below the poverty line of 1 US$ per day. The
problem among these women is not yet known or understood in context of Nigeria.
To answer the above research questions a survey was made in this geographical area.
This study is based on primary (direct) and some secondary (literature reviews) sources.
The two major variables involved in this study are Microfinance and Poverty.
The target group of this study as earlier stated was the members of the Obazu Progressive
Women Association, Mbieri Owerri Imo state in Nigeria. Owerri in Imo State was
selected as a geographical region for studying the above mentioned research question. I
could collate data from other areas, but I have chosen this area because it is one of the
villages that rural women, which engage in such microfinance practices, live. I collated
my empirical data through key informant interviews with some officials of the Obazu
Progressive Women Association Mbieri, and also by using a more detailed questionnaire
on their members. These people were selected because of their key role in the association.
The purpose of using this method was to get individuals opinion about how the MF
works among them and to get a deep understanding of MF and also explore the idea.
Some other possible ways of getting data could be through participant observation where
the researcher interacts with the people and gather data on interested topic. I also was
opportune to visit some of the members in their various business places using such
However, the officials of the interviewed gave brief history of the association and means
to access their members as well.
Data was collected to identify the purpose of Microfinance to the rural women (Obazu
Progressive Women Association) Mbieri, who are the beneficiaries of this credit. The aim
was to find out their experiences in business (such as farming, dress making, trading etc)
with the help of the credit they received from the association. The analysis of the data
was made using the information given by the members of the association through
questionnaire and interview. It was analysed based on the social characteristics of the
study participants. This was just to find out the impact of the credit received from the
association on various members in their different businesses. The questionnaire was in
form of objective questions. The number administered was 72, but only 52 were returned.
Sampling process made the selection. A sample is a small part of something intended as representative of the whole or items selected at random from a population and used to test
hypothesis about the population. In this context the sample of the whole of the women
association was chosen to be 72 questionnaires administered, which represented the
members in question. The sex of the members of the association, their age, and
population was used for the selection process. The questionnaire was only distributed to
the members of the association not the whole populace of that community and mostly to
those who have benefited from the credit. The study challenged the hypothesis
‘Microfinance programs alleviate poverty by increasing income, changing economic
status and empowering women socially and politically in Obazu Mbieri, Owerri Imo
state. This hypothesis was tested from data collected by the researcher from the
association and other related literature reviews.
The study was conducted in August 2007 during the association’s ‘August meeting’
period. This was a period when most of the members give account of their welfare in
various businesses based on the credit received from the association. They relate the
gains made from the credit to the members as well as discuss ways to improve in their
various businesses incase of flaws or losses.
1.4 Ethical Permission
However, before the interview and administration of the questionnaires to the members
was carried out, ethical permission or consent of the officials was granted to the
researcher. This was in order to have free and cordial relationship with them and also
make them confident in answering questions without hiding information.
1.5 Limitations of the study
This study investigated the research problem based on the activities of the women
association. Due to time and content limitation, only data in line with the purpose of this
study was considered. There might have also been some limitation in the sampling
process in choosing a certain number of the total population. The method chosen for this
study might have some limitations also in answering the research questions. Some other
things to consider as limitation during this study are in relation with the people chosen for
the study. Some of them were not interested in being interviewed and felt reluctant also
in filling the questionnaire. The fact that the reluctant ones were assisted by some of
their relatives is also a limitation and it would have been better if they answered the
questionnaire with full confidence and interest. Some of the questionnaires administered
were not returned, as some did not have interest at all in filling it and therefore cared not
to return them unfilled. Some of the members who would have given information about
their loan could not be accessed due to lack of confidence in releasing data. Most
preferred answering the questionnaire than oral interview with the researcher.