It is an indisputable reality that microfinance is playing an increasingly important role in entrepreneurial endeavors and is consequently being acknowledged as a main driver of economic expansion. Entrepreneurs provide value to the economy by commercializing new products, creating new employment, and establishing new businesses. They accomplish this by combining the resources that are already available with novel ideas.
It is apparent that countries with higher levels of entrepreneurial activity enjoy strong economic growth. [Citation needed] [Citation needed] In a nutshell, entrepreneurs serve as the connecting link between innovative ideas and the expansion of an economy. Taking into account the experiences of industrialized nations in North America and West Europe, this is the appropriate course of action. Countries such as the United States of America, the Netherlands, and Japan have all passed legislation to investigate the ways in which entrepreneurial activity might contribute to economic growth. This may help to explain why various governments throughout the world pushed it, given that entrepreneurial skills and methods are utilized to solve a variety of societal problems, including poverty, in addition to providing a source of employment for those who are at a disadvantage.
Soludo (2008), while delivering a speech at a conference with the theme “Improving Access to Microfinance,” revealed that in order to sustain increasing participation of skilled entrepreneurs in the credit and other financial service delivery to the micro, small and medium enterprises in the microfinance sub-sector, the Central Bank of Nigeria (CBN) is forging ahead in its determination to develop a pool of articulate and well-focused entrepreneurs through setting up one Entrepreneurship Development Center. This will allow the CBN to Soludo (2008) went on to say that having access to microfinance by economically active poor and low income earners in Nigeria is a collective responsibility for the achievement of the Millennium Development Goals (MDGs); He added that it provides a strong focus on macro-economic stabilization, especially in the pursuit of massive trades and investment liberalization program to encourage entrepreneurial capacity to develop business and for the business to be successful. Soludo’s research was published in the journal Economic and Political Weekly.
The global significance of Microfinance Institutions in the fight against poverty and the provision of financing for small businesses at the grassroots level has resulted in an urgent requirement to devise strategies for the provision of financial services to vulnerable, low-income, and poor groups on a sustainable basis. Due to the specific circumstances of the impoverished, these services were initially supplied at subsidized prices by donors and the government through non-governmental organizations and self-help groups. This study aims to make a contribution to the vast body of literature that has been compiled by a variety of academics on the topic of microfinance and the growth of entrepreneurial endeavors. The spirit of entrepreneurship in Nigeria has the potential to provide a means of subsistence for the underprivileged, to produce revenue and employment opportunities, and to contribute to the expansion of the country’s economy. Despite the expanding functions it plays, one of its primary limitations is still the ease with which it can obtain credit.