MICROFINANCE AS A CATALYST FOR ECONOMIC DEVELOPMENT INNIGERIA
Authors: Gabriel A Anidiobu, Chinedu Callistus Onyia, Aloysius E Agada
DOI: 10.5281/zenodo.17417560
Published: October 2025
Abstract
<p><em>This study, titled "Microfinance and Human Development in Nigeria", examined the short- and long-run effects of microfinance on the Human Development Index (HDI) using annual data from 1999–2024 obtained from the Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics, Enhancing Financial Innovation & Access (EFInA) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). Applying an ex-post facto design and the ARDL model, the results showed that microfinance deposits (short-run = 0.125, p < 0.05; long-run = 0.218, p < 0.01), loans (short-run = 0.103, p < 0.05; long-run = 0.189, p < 0.01), and savings (long-run = 0.154, p < 0.05) significantly enhanced HDI. Government expenditure also contributed positively, while inflation and interest rates exerted persistent negative effects. Findings implied that although microfinance and public investment promoted improvements in income, education, and health, their benefits were undermined by macroeconomic instability. Study recommended strengthening microfinance regulation, technology adoption, and outreach while stabilizing prices and reducing borrowing costs. It contributed to knowledge by providing empirical evidence on the finance–HDI nexus in Nigeria</em></p>
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