THE ROLE OF MICROFINANCE BANK IN FINANCING SMALL AND MEDIUM ENTERPRISES IN BAUCHI

ABSTRACT SMEs all over the world play a strong role in national development. This is attributed to the massive employment it provides to the citizenry of the country where it exists. The financing of these ‘’goose’’ which have been laying so many golden eggs has come under scrutiny by academics and practitioners. Due to the recognition accorded this very important sector, the Nigerian government established microfinance banks in the year 2007 to serve as mechanisms for financial sources for various SMEs. This study explored the roles of these micro finance banks and institutions on small and medium enterprises as well as the extent to which the small business has benefited from the credit scheme of microfinance bank. Primary data was obtained via questionnaire conducted ATBU microfinance state with their responses summarized in tables. This study advocates the recapitalization of microfinance banks to enhance their capacity to support small business growth and expansion and also to bring to the knowledge of the management of microfinance banks and institutions the impact of the use of collaterals as a condition for granting credit to small business. Keywords: Microfinance banks, Small and Medium Enterprises (SMEs), Financing, Economic development, Credit facilities, Collateral, Nigeria.