The Influence of Microfinance Banks’ Financial Intermediation Activities on The Performance of Small-Scale Food Manufacturing Businesses In Lagos and Oyo States, Nigeria

10.2478/bjlp-2022-002113

Abstract

The study investigated the influence of microfinance banks’ financial intermediation activities on the performance of small-scale manufacturing businesses in Nigeria. The study was limited to two states in Nigeria, Lagos and Oyo states. The study adopted a correlative descriptive survey design and employed a purposive sampling method which was used in selecting seven hundred and forty-seven small-scale food manufacturing businesses in Lagos and Oyo states. After testing and data analysis, the finding and results show that microfinance banks' financial intermediation activity has no significant influence on the performance of small-scale food manufacturing businesses in Lagos and Oyo states. The study however recommends that microfinance banks ought to focus more on ethical and professional conduct by ensuring that loans and credits are given to credible and promising entrepreneurs; also reducing the strict policies in credit supply to small and medium enterprises (SMEs); monetary authorities need to encourage MFBs to create more branches that can enable investor in rural areas to have access to credit facilities as well as to save. the central bank and other monetary policy regulators ought to have a common opinion to create a specialized banking financial intermediation role that is responsible for supporting and financing small-scale manufacturing investments in the economy. Lastly, there is a need for both private organizations/individuals and the government to assist microfinance banks in improving the performance and growth of small-scale businesses.