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ABSTRACT
The study investigated the effect of micro-credit finance on selected small scale business beneficiaries of micro-credit loans of Lift Above Poverty Microfinance Bank, Benin City, Edo State with a view to identifying the socioeconomic characteristics of small scale business owners benefiting from micro-credit financing; determine the size of credit obtained by small scale business owners from LAPO micro finance bank; investigate the effect of the injection of micro-credit on the record-keeping practices, employment and sales of the micro-enterprises; ascertain the conditions stipulated by LAPO for obtaining micro-credit by the enterprises and identify the problems encountered by the enterprises in assessing micro-credit from LAPO. 100 respondents made up of small business owners whose businesses ranged from provision stores, paint making business, tailoring, fast food stores and fashion boutiques were chosen through convenience sampling. Findings revealed that majority of beneficiary business operators were female. Majority of the respondents were former civil servants who have either resigned or left to start their own business. Otherwise, previous work experience of respondents range from hair dressing, automobile mechanics. 13% of the respondents had no previous work experience. Majority of the respondents received above N20,000 in micro-credit loan facility. This constitute 53% of the total respondents sampled. Majority of sampled respondents (83%) affirmed that the microcredit helped to increase their business volume. On the problems encountered during the application for the micro credit, majority (27%) hinged problems encountered on application procedure. Other problems were credit institution being too far away, high interest rate, demand for collateral and guarantors as well as too much delay in approval of loan. Based on the findings of the research study, it was recommended that policy-makers in government as well as other credit delivery institutions should focus on the provision of regular and sustained financial support for the Microfinance institutions to enable them carry out the business of banking and loan grants to small business operators, microfinance institutions should endeavour to have the small business operators in mind when designing application procedure for micro-credit facility since small business operators are barely educated and would not be amenable to too much paper work and bureaucracy. This will in turn go a long way towards ensuring increased volume in business level and a boost in the economy over a long period of time. This study shows that continued provision of credit to small business operators impacts positively on their volumes of business operation over time and lastly, since small business operators require only so little credit, the hurdle of collateral and guarantors should be expunged from procedure in order to afford many others to become eligible for loan grant.
