Impact of Microfinance Banks on the Performance of Small Scale Businesses in Ekiti State

The study examined the impact of micro finance banks on performance of small scale businesses in Ekiti State. Three (3) research questions were raised and literature of other researchers were reviewed. The study adopted the descriptive survey research design and the instrument for data collection was a questionnaire; it was built around the research question by the researcher and validated by the researcher’s supervisor. The questionnaire was structured according to the research questions and distributed to sample size of two hundred (200) respondents made up of staff of microfinance banks in Ekiti State was used for the study. Data collected were analysed using descriptive statistics by means of frequency count, percentage, Mean and standard Deviation, while regression analysis was used to test for the hypotheses. The findings of the study revealed that microfinance credit facilities has significant impact on the performance of small-scale businesses as it has enabled businesses to expand its operations, made it easier for businesses to manage cash flow and working capital and has significantly improved the financial stability of many business with an R2 value of 0.679 and a p-value of 0.038. Financial advice offered by microfinance banks has significant impact on the performance of small-scale businesses, hence, financial guidance provided has helped my business in effectively managing cash flow and minimizing financial risks, with an R2 value of o.679 and a p-value of 0.015. Also, microfinance customer service has significant impact on the performance of small-scale businesses. Hence, the quality of customer service provided by microfinance institutions has made it easier for businesses to access loans and helped SMEs better understand loan terms and repayment schedules, leading to better financial management for businesses, with an R2 value of o.679 and a p-value of 0.00. It was however recommended that the microfinance banks should invest in comprehensive financial education initiatives for small-scale business owners in Ekiti State. Microfinance institutions should develop more flexible and customized loan products that meet the specific needs of small businesses. Also, improving the quality of customer service in microfinance institutions can help build stronger relationships with small-scale business owners. Offering personalized assistance, prompt responses to queries, and consistent follow-up on loan management can ensure that entrepreneurs receive the support they need, which will, in turn, boost their confidence and contribute to the long-term success of their businesses.