Browsing by Author "Babajide Ayopo Abiola"

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    Microfinance Banks’ Loan Size and Default in Some Selected Microfinance Banks in Lagos State, Nigeria
    (International Conference on Education and Social Sciences, 2019-02) Adu Cecilia Adurayemi; Owualah Ikechukwu Sunday; Babajide Ayopo Abiola
    The study investigated the extent to which loan size has contributed to default rate of MFBs borrowers in Lagos State having a population of one hundred and seventy eight with a sample size of twenty microfinance banks located in the state capital. Two hundred copies of questionnaire were administered while one hundred and eighty two were returned for analysis using linear regression.It was found out that loan size and instalment size play significant roles in greater risk of default than lending rate. A unit increase in loan size and instalment size increases harzard ratio by 1 unit at 1 per cent level of significance. The result thus indicated unfavouarable survival rate for the micro finance clients which implies that the loan size could significantly result to increase in risk associated with client’s non -repayment. This shows that the effect of loan size and the instalment size during loan default is highly significant such that the higher the loan size and instalment size, the more the risk associated with it during a period of default. However, lending rate seems not to play a dominant role in influencing loan default though it could contribute to loan failure but not significant as expected. It was suggested that loan size should be based on certain percentage of a borrower’s net income.
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    Microfinance Bank’s Client-Enterprise Profitability And Loan Failure in Ogun State, Nigeria
    (International E-Journal of Advances in Social Sciences, 2019) Adu Cecilia Adurayemi; Owualah Ikechukwu Sunday; Babajide Ayopo Abiola
    The study investigated the client-enterprise profitability and loan failure of microfinance banks’ (MFBs) borrowers in Ogun State with a population of forty seven MFBs where twenty MFBs were selected as sample size for this study. The survey design was used through the administration of questionnaire. The linear regression method was used in analysing data and it was found out that effective monitoring and constant record checking were ensured by the microfinance banks’ staff that made the borrowers keep records of their business transactions through the positive correlation with loan size structuring, (X2 =171.859; pvalue < 0.01 and correlation coefficient =0.416; p-value <0.01); enterprise profitability further confirmed the highest hazard on period of default with further evidence from the Omnibus tests of model coefficients (X2 = 38.645, degree of freedom=5, P-value<0.001) as indicated in the statistical relevance of the model. It was recommended that there should be an interactive session (interview) between the loan manager and borrower for the establishment of facts stated in the loan request form; quality cash-flow analysis of the enterprises should be properly done before loan is granted to small and medium scale enterprises (SMEs) likewise there should be an effective monitoring of loan usage by monitoring team of the microfinance banks to avoid diversion.