Abstract:
Credit facilities continue to pose a major threat to the survival of the SME
sector. Traditional banks have failed to advance credit facilities to the SMEs
due to challenges with collateral securities and information. This study sought
to assess the relevance of microfinance in terms of meeting credit needs and
reducing poverty among the small business owners of Jukwa in the Central
Region. Thirty-one (31) respondents were sampled for the study. Descriptive
statistics were used for the presentation of the findings. Questionnaire was also
used to collect data for the study. Analyses of the responses revealed that
majority of the respondents have felt positive impact of microfinance
activities. It is found that, through microfinance credit, considerable amount of
business capital has been accessed either for start-up or for expansion. Family
burdens among the respondents were seen to decrease owing to microfinance
credit. Others also felt the positive impact as it helped them in support of their
children’s education. The key problem associated with microcredit, according
to the respondents was the exorbitant interest rate charged by the microfinance
institutions. This situation prevented many potential beneficiaries from
subscribing to microfinance credit. It is recommended that the microfinance
institutions lower their rates so as to attract more clients for their businesses.
