Aliyu, Abdulaziz and Gambo, Nasamu and Enesi, Ozigi Emmanuel and Ibrahim, Musa (2023) Central Bank Regulations and the Financial Sustainability of National Microfinance Banks in Nigeria. European Journal of Accounting, Auditing and Finance Research, 11 (10). pp. 73-97. ISSN 2053-4086(Print), 2053-4094(Online)
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Abstract
This study examines the impact of Central Bank Regulations on the Financial Sustainability of National Microfinance Banks in Nigeria. The study employed the expost-facto research design. Data was collected from the central bank bulletins and the financial reports of the sample seven national Microfinance banks. The data collected was analysed using Multivariate Analysis of Variance (MANOVA). The findings derived from the empirical analysis revealed significant relationships between the Minimum Capital Requirement, and the financial sustainability indicators, including returns on assets (ROA) and returns on equity (ROE) and confirmed that the Minimum Capital Requirement imposed by the central bank has a significant impact on the financial sustainability of microfinance institutions. Based on the findings of the study, the following policy recommendations can be made; Policymakers and regulators should continue to enforce and monitor the Minimum Capital Requirement for microfinance banks. Adequate capitalization is essential for the financial sustainability and profitability of microfinance institutions. However, the capital requirement should be flexible enough to accommodate the specific needs and characteristics of microfinance banks, considering their focus on serving the underserved segments of the population. And Microfinance banks should prioritize maintaining an adequate level of capital to ensure their ability to generate returns on assets. This can be achieved through effective capital management strategies, including attracting additional capital from investors, optimizing internal capital generation, and ensuring efficient use of capital in productive activities.
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences > H Social Sciences (General) |
| Depositing User: | Professor Mark T. Owen |
| Date Deposited: | 12 Oct 2023 13:50 |
| Last Modified: | 12 Oct 2023 13:50 |
| URI: | https://tudr.org/id/eprint/2287 |
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