THE ROLE OF MICROFINANCE BANKS AND SELF HELP GROUP’S IN REDUCING POVERTY IN KADUNA STATE

Abstract This project examines poverty reduction through micro finance banks and self help groups (SHGs) in Nigeria. Poverty reduction has been an important development challenge over decades. One of the identified constraints facing the poor is lack of access to formal sector funds to enable them to take advantage of economic opportunities to increase their level of output, hence move out of poverty. The intervention of microfinance through SHGs has brought tremendous changes in the life of beneficiaries. Hence, the main objective of this project work is assessing poverty reduction through microfinance banks and SHGs. One hundred and sixty two questionnaires were distributed using a simple random sampling technique. They were thrown from selected microfinance bank beneficiaries in Kaduna south local government. Questionnaires were analyzed using frequency, percentage and ranking. The results revealed that Microfinance bank and SHGs have significant influence on poverty reduction basically because they enhance financial autonomy for the active with a mean value of 4.8 which represent strongly agreed. The study also revealed some problems of Microfinance bank and SHGs which include High operating cost and Limited market access with a p value of 0.023 < 0.05. The study therefore recommended that the banks and other financial institutions and state government should come forward to help the rural poor through SHG's and provide liberalized credit facilities at cheaper rates of interest.