Theory of Financing Micro Enterprises: The Nigeria Experience

Abstract

Microenterprises mostly carried on by microenterpreneurs, men and women who though do not lack potential but have limited access to facilities essentially finance, contributes significantly to economic growth, social stability and cquity (Rubinstein, 1993). In this study, we discussed salient issues on micro-entcrprises in developing countries including the major financial sector reforms espccially in the Nigerian economy from 1976 till date, and reasons for their ineffectiveness which we hope will serve as a lesson to policy makers. We also examined micro financining and micro finance models which are suitable for developing economy such as the Grarnmen Bank, Esusu, linkage model, the donor model among others and bringing out the financing gaps which is a signal to the future of the micro finance programmes in developing economy. We discovered that the-re is significant room for improvement, within the current programmes using principles and strategies established in this paper, if serious issues of supervision by regulatory authorities can be properly addressed.