ABSTRACT

 This paper investigates the Impact of Microfinance Credit on Economic Growth in Nigeria over the period of 1995-2018. This study made use of quantitative secondary data from the Central bank of Nigeria (CBN) statistical bulletin (2018) to carry out this study. Emphasis is made on the primary role of microfinance institutions in Nigeria which is poverty reduction and small scale enterprise financing. Agricultural, manufactural and Transport micro credits were used as proxy of the activities of microfinance institutions in Nigeria while Gross Domestic Product was used as the proxy for economic growth. This study employed the augmented dickey-fuller, unit root test, cointergration test, error correction model (ECM). Empirical evidence from the study has shown that the activities of microfinance credits have the capacity to influence the entire economy if it is well coordinated The results of the study indicate that agriculture and transport micro credits has a significant and positive impact on economic growth based on the magnitude and the level of significance of the coefficient and f-value while manufacture micro credits has an insignificant and negative impact on economic growth. However, the overall significance of the model shows that the activities of the microfinance banks cannot be overemphasized in the pursuance of a sustained economic growth in Nigeria. It is therefore recommended that the government should create an enabling environment capable of supporting the microfinance banks in micro credits delivery.