Department of Banking and Finance, University of Nigeria, Enugu Campus, Enugu, Nigeria; Department of Banking and Finance, Renaissance University, Ugwanka, Enugu, Nigeria; Department of Management, University of Nigeria, Enugu Campus, Enugu, Nigeria
Onwumere, J.U.J., Department of Banking and Finance, University of Nigeria, Enugu Campus, Enugu, Nigeria; Ibe, I.G., Department of Banking and Finance, Renaissance University, Ugwanka, Enugu, Nigeria; Ugbam, O.C., Department of Management, University of Nigeria, Enugu Campus, Enugu, Nigeria
One of the main policy objectives for the establishment of microfinance banks in Nigeria was to assist small and medium scale enterprises in Nigeria in raising their productive capacity and level of employment generation, thus alleviating poverty and enhancing human capital development. It is against this background that this study empirically examines the impact of microcredit granted by microfinance banks on poverty alleviation and enhancement of human capital development in Nigeria from 1999-2008. The study adopted the OLS regression technique to test the hypotheses formulated. Microfinance Banks financial intermediation activities are proxied by loans to deposits ratio as the independent variable while poverty index (PI) and Human Development Index (HDI) are the dependent variables. The results generally indicate that financial intermediation activities of Microfinance banks in Nigeria had negative non-significant impact on poverty index and a positive impact on human capital development within the period under study. It accordingly recommended that government should create an enabling environment for microfinance banks to increase the rate of financial intermediation activity as to reverse the trend observed on the impact of microcredit on poverty alleviation as well as continual improvement in human capital development of Nigerian citizens. © EuroJournals Publishing, Inc. 2012.