MICROFINANCE BANK LOANS, INCOME AND POVERTY ALLEVIATION: A CASE STUDY OF CHIKUN LOCAL GOVERNMENT AREA, KADUNA STATE (1990–2024)
Abstract
This study evaluates the effectiveness of microfinance bank loans as a tool for income generation and poverty alleviation in Chikun Local Government Area, Kaduna State, covering the period from 1990 to 2024. Despite the proliferation of microfinance institutions, the impact on the socioeconomic status of the rural and peri-urban poor remains a subject of academic debate. Using a longitudinal and descriptive research design, the study assesses the correlation between loan accessibility, business expansion, and the "Poverty Gap Index" among beneficiaries. Data obtained from microfinance clients and bank records indicate that while micro-loans have successfully boosted the income of petty traders and small-scale farmers, high interest rates and short repayment periods often diminish the long-term poverty-alleviating effects. The study concludes that for microfinance to effectively reduce poverty in Chikun, there must be a shift toward more flexible credit terms and integrated financial literacy training.
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