• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

LoanSpot

Information on everything Loans & access to Credit in NIgeria.

  • Personal Loans
  • Business Loans
  • Building Credit
  • Reviews
  • Contact us
  • Find a loan

Do SMEs in Nigeria Really Need Microfinance Banks?

March 19, 2020 by Finance Writer Leave a Comment

Microfinance banks exist to provide small business owners and entrepreneurs access to capital. Often, these small and individual businesses don’t have access to resources and funds from traditional banks, and only know how to get loans from microfinance banks. This challenge makes it relatively difficult to secure loans, insurance, and investments that will help grow their business.

Essentially, this is why microfinance banks are here to stay – to provide loans, credit, even insurance policies and money transfers to the small business owner and entrepreneur.

Why Are Microfinance Banks Important?

SMEs in Nigeria and Microfinance Banks

Like we have established, microfinance banks help the financially-marginalised by providing them with the necessary capital to start a business and work toward financial independence. These loans are significant because they are issued even though the borrower has no collateral. However, the interest rates for microloans are normally high because of the risk of default.

Microfinance institutions provide small loans as well as another resources to business owners to help get their businesses running smoothly. Without microfinance banks, these businesses may have to resort to borrowing money from family and friends.

Examples of popular microfinance banks in Nigeria include RenMoney, AB Microfinance Bank, LAPO Microfinance Bank, FBN Microfinance Bank and others.

Do Microfinance Banks Work in Nigeria?

On the one hand, microfinance banks are a means to end the cycle of poverty, decrease unemployment, and aid the financially-marginalized. On the other, however, some believe microfinance banks have lost their feel and have therefore gone sour. This notion stems from the argument that microfinance banks plunge business owners into deeper debt. Interestingly, most of these banks like Nirsal Microfinance Bank still grant different kinds of loans.

Conclusion

Whichever way we examine the space of microfinance in Nigeria, they constitute a part of the financial sector. Some experts believe microfinance banks are capable of contributing to the Nigerian economy by curtailing poverty. Again, this is associated with acknowledging microfinance banks as tools for financial revolution.

Find A Loan

Check out the Related Posts below:

  • How to Get Loan From Microfinance Banks in Nigeria
  • Microfinance banks in Nigeria
  • List of microfinance banks in Lagos
  • Susu Microfinance Bank - What you need to know
  • First City Monumental Bank (FCMB) Microfinance Bank…

Filed Under: Business Loans

5 Ways to get out of debt
Prev 1 of 4 Next
  • 5 Ways to get out of debt

    5 Ways to get out of debt

  • 5 Cs of Credit

    5 Cs of Credit

  • 5 Major Parties Involved In A Letter Of Credit

    5 Major Parties Involved In A Letter Of Credit

  • Five Ways Personal Loans Can Save the Day

    Five Ways Personal Loans Can Save the Day

Prev 1 of 4 Next

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published.

Primary Sidebar

Recent Posts

  • Difference between credit card and debit card – What you should know
  • Companies with lowest loan interest rates in Nigeria
  • Loanspot Launches in South Africa, Kenya and Ghana
  • Forex Loans – Everything you should know
  • List of MFBs that give loans to salary earners in Nigeria

Recent Comments

  • Japan on GTbank Salary Advance – Everything You Need to Know
  • anxiety on Difference between credit card and debit card – What you should know
  • Japonia Portal on GTB Loan: A Complete List of All Kinds of Loans You Can Get from GTBank
  • Japonia Portal on How to Acess Opay Loan (Okash Loan) – Everything You Need to Know
  • muğla escort on List of Platforms Granting 24hrs Loan in Nigeria
  • About Loanspot.ng
  • Contact us
  • Disclaimer
  • Privacy Policy

Copyright © 2021 Loan Score. All Rights Reserved