PROJECT BODY:

CHAPTER ONE

1.0     Introduction

1.1     Background to the Study

The issue of sustainable development in the Third World countries like Nigeria has been a growing concern to both the government and the private sector. The huge amounts of money the government has been investing on this platform over the years have not yielded any meaningful result. Poverty is a characteristic of Nigerian households or individuals. It has been realized in the recent years that there are limits to which government can singly promote development. Most of the traditional functions being carried out by the government in most countries ranging from the provision of economic development are becoming increasingly difficult to accomplish. Nigeria as a nation has her own peculiar developmental challenges because of maladministration, corruption, infrastructural decay, insecurity of lives and properties, unstable macroeconomic regime and unpredictable fiscal policies by successive administration (Fasua 2008).

Thus, both the public and private sectors of the economy and every segment of the society need to be involve in the industrial development process of the country it is on this basis that government begins 10- engage in privatization policy within the view of allowing the private sector participate in the economic development of the

nation. Consequently, various governments of the nation begin to find pathways to involve the private sector in the developmental process of their country’s economy.

One of the responses challenges of development in the developing countries IS the encouragement of entrepreneurial development scheme. Nigeria had even taken a more strongly robust stop by including entrepreneurial studies in the academic curriculum of her educational system. The believe of such policy makers is that such decision will inculcate to fix an idea into someone’s mind entrepreneurial spirit in the mind of people so as to prepare them for wealth creation through small scale enterprises (Fasua 2006). Small scale enterprises are very crucial to the development of a country’s economy, especially countries like Nigeria. Entrepreneurship brought about fact that provides a strong base for something. It is bedrock of any nation’s industrialization.

A number of studies have been carried out on the impact of micro finance on entrepreneurial development is evidenced by the fact that some academic journals have devoted special issues to research establishing this linkage. Some scholars focused on the mechanism by which poverty is reduced. Amin, Rai, and Topa (2003) their article on the ability of micro finance to reach the poor and easily named (vulnerable)

They focus their article in such a manner because of concerns that micro finance is only serving people slightly below or above the line of poverty, however the really poor and destitute having no money, no home, no food etc. are being systematically excluded, By contrast something that is very life to something else, a very notable difference between Copestake, Halokra and Johnson (2001) analyse the impact of micro finance on firm and individual wellbeing. Cope stake at all focus on business performance and household income to establish a link between the availability of micro finance and overall wellbeing of the poor.

Evans and Adams (1999) approach the microfinance question at a slightly different angle. However, they seek to explain non participation in the microfinance evolution, stating that while micro finance is used as a viable instrument in fighting poverty, more than 75% of the poor individuals choose not to participate for various reasons.

Ryne and Holt (1994) provide a meta-analysis of microfinance and focuses on women empowerment, intending to show while various studies conflict in their conflict in their conclusions as to the impact of micro finance bank on women empowerment, Park (2001) evaluation the actual micro finance programs in china using three(s) keys measure (targeting), sustainability and overall impact).

Thus both research and practice have seen an increasing concern about the impact of micro finance. In spite of this emphasis, current research did not provide sufficient justification for the link between micro finance and entrepreneurial development in the developing countries. Besides, the empirical evidences emerging from various studies about the effect of micro finance on entrepreneurial development have so far yielded mixed results that are inconclusive and contracting, thus, the question of whether micro finance improve or worsens entrepreneurial development is stills worthy of further research such as the one being undertaken in this study. In addition, the impact of microfinance on entrepreneurial development has not received adequate research attention in Nigeria. Research also shows most of the studies on impact of microfinance on entrepreneurial development that have .been reported were carried out industrialized countries. This means that there is a major gap in the relevant literature on developing countries including Nigeria, which has to be cured by research.

This research attempts to fill this gap by studying the situation of Nigeria and providing more empirical evidence on the effects of micro finance on entrepreneurial development,