THE ROLE OF MICROFINANCE I N POVERTY ALLEVIATION IN NIGERIA

Abstract

Microfinance which is also referred to as Microcredit is the extension of loans to entrepreneurs whom are too poor to be qualified for the traditional bank loan especially in developing countries. It enables very people to engage in self - employment project that generate income. The concept of microfinance was developed by Muhammad Yunus, a U.S educated professor of Economics, who first got in the business of fighting poverty during the 1973 famine in his homeland of Bangladesh, one of the poorest countries in the world. Yunus discovered that small loans could make a significant difference in a poor person’s survival. His first loan consisted of 27 dollars from his own pocket, which he lent to a woman who made bamboo furniture, which she sold to support herself and her family . In 1976, Yunus founded the first micro-finance bank called the Grameen Bank, which provides loan to the Bangladesh people. Since then it has issued more than a billion dollars in loan to some 2.4 million borrowers.