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BUILDING HUMAN CAPITAL FOR THE SUSTAINABILITY OF MICROFINANCE BANKS IN NIGERIA

CHAPTER ONE
 INTRODUCTION 
1.1 BACKGROUND OF THE STUDY
 The ability of any organization to execute its strategy and achieve its goals depends on how it can attract, organize, develop and manage its human resources effectively. Any organization that aspires to a positive change or improved quality service delivery would as a matter of necessity strive to engage quality human resources. Under a competitive environment, the ability of a firm to generate sufficient profit and the competence in planning hinge very much on the worth of human resources particularly when adequate resources are present to satisfy the requirement of demand forecast. This might have been the major reason why Giwa (1990:32) asserts that of all the resources an organization or nation requires, human resources is the most important. The role of quality human resources in achieving organizational goals and objectives cannot be over-emphasized. It is the human capital that dictates the quality of service and the overall performance of such organization. It is the human resources (capital) that organizes and manages all other resources of the organization. It determines the appropriate quantity, quality and mix of other resources. Hence, any organization that fails to give the require attention to its human capital is doomed to fail. In order words, the ability of any organization to face the challenges of the current global competition and technological changes calls for resourceful human capital. The micro-finance firms like any other sector have their goals and objectives to pursue. They equally have their strategies to execute in order to achieve these goals. However, like other organizations, this task cannot be carried out effectively in the absence of a virile, formidable and quality human capital. Microfinance banks like any other organization face daunting challenges in the market place. Of particular reference is the stiff competition, which they have to contend with especially among the more established and experienced commercial banks. They need not only quality human capital; the manpower must be in the right mix and quantity to complete favourably in the business environment. The practice of micro finance in Nigeria is culturally rooted and dates back to several centuries. The traditional microfinance institutions provide access to credit for the rural and urban low income earners. They are mainly the informal Self Help Groups (SHGs) or Rotating Saving and Credit Association (ROSCA) types. Other providers of microfinance services include saving collectors and co-operative societies. These informal financial institutions generally have limited outreach due primarily to paucity of loanable funds. In order to enhance the flow of financial services to Nigeria’s rural areas, government has in the past initiated a series of publicly – financed micro/rural credit programmes and polices targeted at the poor. Notable among such programmes were the Rural Banking Programmes, sectorial allocation of credit concessionary interest rate and the Agricultural Credit Guarantee Scheme (ACGS). Other institutional arrangements were the establishment of Nigerian Agricultural and Co-operative Bank (NACB), the National Directorate of Employment (NDE), the Peoples Bank of Nigeria (PBN), the Community Banks (CB) now Microfinance Bank, and the Family Advancement Programme (FEAP). It also created the National Poverty Eradication Programme (NAPEP) with the mandate of providing financial services to alleviate poverty. The National Association of Microfinance Banks NAMFB, (2006) defines microfinance Banks as a “self-sustaining financial institution owned and manage by community or group of communities, individual or group of individual, community development association, private or corporate entities and foreign investors for the purpose of providing credit, deposit, banking and other financial services to its members largely on the basis of their self recognition and credit worthiness”. The microfinance policy launched on 15th December, 2005 due to the prolonged sub-optimal performance of many existing community banks has the following goals and objectives; Provide diversified, affordable and dependable financial services to the active poor in a timely and competitive manner that would enable them to undertake and develop long term sustainable entrepreneurial activities; Mobilize saving for intermediation; Create employment opportunities and increase the productivity of the active poor in the country thereby increasing their individual household income and uplifting their standard of living; Enhance organized, systematic and focused participation of the poor in the socio-economic development and resources allocation process; Provide veritable avenues for the administration of the micro credit programmes of government and high net worth individuals on a non-recourse case basis and Render payment services such as salaries, gratuities and pension for various tiers of governments. (CBN 2005:12). Economic growth and development cannot be achieved without putting in place carefully crafted policies to reduce poverty through empowering the people by increasing their access to factors of production. The latent capacity of the poor for entrepreneurship would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant, increase employment opportunities, enhance household income and created wealth. Microfinance is about providing financial services to the poor who are not traditionally served by the conventional institutions. The formal financial system provides services to only about 35% of the economically active population while the remaining 65% are excluded from access to financial services (CBN, 2005:6). Microfinance policy objectives are geared towards creating microfinance banks that are financially reliable, self-sustaining and integral to the communities in which they operate with the potentials to attract more resources and expand quality services to their customers (Lemo, 2007:3). The nations’ emerging economy, therefore, requires the active participation of the economically active population who are poor. This can be achieved by having a vibrant and robust microfinance sub-sector that will be adequately integrated into the main stream of the national financial system and provides the stimulus for growth and development. Microfinance is about providing financial services to the poor who are traditionally not served by the conventional financial institutions. This shift in emphasis to grass root development has become a matter of necessity and in effect it has become imperative for government to lift-up the rural low-income segment of the Nigerian society if it is to undergo true economic transformation. Therefore to achieve these fundamental objectives and goals of microfinance policy optimally, a formidable and virile workforce, quality manpower is needed for economic transformation and stability.

Project detailsContents
 
Number of Pages94 pages
Chapter one Introduction
Chapter two Literature review
Chapter three  methodology
Chapter  four  Data analysis
Chapter  five Summary,discussion & recommendations
ReferenceReference
QuestionnaireQuestionnaire
AppendixAppendix
Chapter summary1 to 5 chapters
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