Profitability of Microfinance Institutions in Nigeria - Thesis Example

Such organizations are able to grant small micro-loans to members of the lower class who can both demonstrate a need and a means to pay back the loan. In addition, the findings of this report indicate that microfinance institutions are beginning to provide needed financial services to help individuals begin to save and get themselves on the path toward financial independence. At the same time, microfinance institutions in Nigeria are facing difficult challenges to their own sustainability and profitability moving forward, so the recommendations contained in this study are designed to push the institution into a more successful future.

Throughout the world, it has become increasingly noticeable in recent decades that the gap between the developed and developing nations of the world continues to widen to an almost unfathomable proportion. This truth is not only seen from an individual wage earner’s perspective, as it is truly a regional and global economic phenomenon1. In an increasingly competitive, modern, and globally connected society, developing nations are often left behind in the movement towards progress and economic expansion.

With this reality in mind, it can be seen that the gap is now increasing almost exponentially, with individuals and businesses in the poorest regions of the world left wondering how they will ever find the financial and human capital necessary to improve upon and provide for their own eventual economic freedom2. It is no secret that much of the world has been concerned over the course of the past century with the amount of poverty that is existent in various parts of the globe, and how the rate of poverty seems to only be increasing.

Consider the abject poverty and poor economic infrastructure that has been endemic to the countries of West Africa for all of the modern eras. One of the primary reasons limiting economic expansion in countries such as Nigeria is the basic lack of access.