D0142635

IOSR Journal of Humanities and Social Science (IOSRJHSS)
ISSN: 2279-0845 Volume 1, Issue 4 (Sep.-Oct. 2012), PP 26-35
www.iosrjournals.org

Impact of Microfinance Bank on Standard Of Living of
Hairdresser in Oshodi-Isolo Local Government of Lagos State.
1
Olusanya, Samuel Olumuyiwa, 2Oyebo Afees Oluwatosin
1lecturer Lagos State University External System. Economics Department.
2lecturer Lagos State University External System. Marketing Department

Abstract: The research study takes a look at the impact of Microfinance bank on standard of living of
hairdressers in Oshodi-Isolo local government area (LGA) of Lagos State as a Poverty eradication strategy
among the society. The objectives of the study examine how Microfinance bank in Oshodi-Isolo has impacted
greatly on the business of hairdressers in the local Government and to also examine the impact of Microfinance
on asset acquisition and savings of hairdressers in that LGA. A total of 120 hairdressers who registered with
Oshodi-Isolo LGA were used as study sample. However, primary data of questionnaire analysis was adopted
and Spearman’s rank correlation coefficient analysis was used as the estimation techniques. More so, the
hypotheses of the research were tested at 5% level of significance and the result revealed that there is a
significant relationship between Microfinance bank efforts and standard of living of hairdressers in Oshodi-
Isolo local Government area of Lagos state, and the implication of this is that due to the existence and help of
Microfinance bank, Poverty has reduced a little bit among the hairdressers association in Oshodi Isolo LGA. In
conclusion, the study recommend that Government at Local, State and Federal levels through the Central bank
of Nigeria should ensure that Microfinance bank loans are easily obtainable and repayment should include a
grace period with reasonable schedule instead of weekly payment period that is commonly found among the
microfinance banks in Nigeria.
Keywords: Hairdressing, Liquidity, Micro-Credit, Micro Enterprises, Microfinance Bank, Standard of Living,
Poverty.

I. Introduction
The issue of poverty has been a major concern to many nations, particularly the developing countries.
Poverty has been defined as a situation where a population or a section of the population is able to meet only its
bare subsistence, the essentials of food, clothing and shelter, in order to maintain a minimum standard of living
(Balogun, 1999). The World Development Report (WDR) from the World Bank (1990) notes that conditions
could be described as poor if per capita income or consumption of the individual is below US $370 or very poor
if it is below US $275 at any time period.
Englama and Bamidele (1997) aptly summarized the definition of poverty, in both absolute and relative
terms as a state where an individual is not able to cater adequately for his/her basic needs of food, clothing and
shelter, meet social and economic obligations; lacks gainful employment, skills, assets and self-esteem; and has
limited access to social and economic infrastructures. In other words, the poor lacks basic infrastructure such as
education, health, potable water, and sanitation, and as a result has limited chance of advancing his/her welfare
to the limit of his/her limited access to social and economic infrastructures”. In other words, the poor lacks
capabilities The World Bank (1993) describe the poverty line as the value of income or consumption necessary
for (a) the minimum standard of nutrition and (b) other “necessities.” The Human Development Index (HDI) of
the United Nations Development Programme (UNDP, 1996) introduced by the United Nations to give indication
of poverty or prosperity level within a society and globe, considers life expectancy at birth, adult literacy rate,
combined primary, secondary and tertiary enrolment ratio and the Real GDP per capita as factor indicators of
interest.
Oladunni (1999) notes that poverty is a worldwide phenomenon; however, Nigeria is one of the poorest
countries in the world. The situation has reached an alarming stage as more than 45% of the population lives
below the poverty line, while 67% of the poor are extremely poor. For example, the Bureau of Statistics‟ (BOS)
report for the period 1980-1996, indicates about 67 million Nigerians are living below the poverty level. The
report also indicates that from 1980 to 1985, the percentage of rural dwellers and urban inhabitants in the core
poverty bracket rose from 6.5 and 3.0 percent to 14.8 and 7.5 percent, respectively. Within the same period, the
percentage of moderately poor in the rural areas rose from 21.8 to 36.6 percent and 14.2 to 30.3 percent,
respectively. Also the number of non-poor in both rural and urban areas dropped from 71.7 and 82.8 percent to
48.6 and 62.2 percent, respectively (Awoseyila, 1999; Okumadewa, 1999). The increasing incidence of poverty
in Nigeria within this period is not surprising. Going by the documentaries of Oladunni (1999) the overall

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Impact Of Microfinance Bank On Standard Of Living Of Hairdresser In Oshodi-Isolo Local
dependency ratio in Nigeria is 234 dependents per 100 gainfully employed persons. In the rural areas, it is 286
dependants per 100 workers, while in the urban centre it is 219 dependants per 100 workers. The
labor force age (between 15 and 64 years) dependant ratio is 259 dependants per 100 workers nationwide. It is
302 and 222 dependants per 100 workers in the rural and urban centers, respectively.. The above scenario works
concertedly to further reinforce the poverty syndrome of the average Nigerian employee, as each bears heavy
economic burden of over 200 non-workers.
Poverty as noted earlier is not peculiar to Nigeria or developing nations alone, rather it has attracted worldwide
attention.
Egwuatu (2008) documents over 500 million of the world‟s population lives under very poor
conditions, but they are economically active. They lack access to basic necessities of life: food, shelter and
primary health care. They earn their livelihoods by being self employed as micro entrepreneurs or by working in
micro enterprises (very small businesses which may employ up to 5 people). This set of people has no hope for
expansion of their enterprise because of inability or incapability of accessing banks for credit.
More than 80 percent of all households in developing countries do not have access to institutional
banking services. This is because they lack the collateral to secure loans from formal financial institutions.
Besides, the technical backing needed for creativity and enhanced productivity is absent. Ehigiamusoe (2008)
notes that microfinance assumes the poor know what to do to enhance their economic condition, but they
operate from a slim economic base which can be strengthened by funds borrowed on affordable terms. In
September 2005 at the World Summit, the 60th high-level plenary meeting of the United Nations General
Assembly gathered 151 Heads of State from all over the world at the UN Headquarters for the purpose of
getting the world leaders to review progress in reaching the targets of the Millennium Development Goals
(MDG), with the primary aim of eradicating extreme poverty by the year 2015. Microfinance was prominent on
the agenda of this historic gathering. The most significant recognition of its importance was made in the 2005
World Summit Outcome Document adopted by the gathering, which states, “We recognize the need for access
to financial services, in particular for the poor, including microfinance and microcredit” (Egwuatu, 2008). Thus,
microfinance has emerged as a growing industry to provide financial services to very poor people. It is premised
on the fact of economic relations, that the poor remain poor because they are deprived of access to life
transforming opportunities. Service users include artisans, small holder farmers, food processors, petty traders
and other persons who operate micro-enterprises.
Sequel to the consolidation exercise by the CBN under the leadership Chukwuma Soludo and the emergence of
mega banks, the concept of microfinance banks, MFB, was introduced to provide a platform for the
underbanked segment of the economy that may not be able to meet the stringent requirements of the
conventional banks. It was also to be private sector driven. But this has already run into serious problems as
most MFBs are already facing one financial challenge or the other. From the above analysis, one can come to
the logical conclusion that government-driven poverty alleviation programs are viewed by the poor as largesse
while private sector-led programs are seen by promoters as avenues of mobilizing funds for their businesses. It
is apposite to examine why the MFBs are having problems. Therefore the research study will tend to examine
the following objectives; to examine how Microfinance bank in Oshodi Isolo has impacted greatly on the
business of hairdressers in the local Government and to also examine the impact of Microfinance on asset
acquisition and savings of hairdressers in that LGA.

II. Brief Literature Review
The issue of poverty has been a major concern to many nations, particularly the developing countries.
Poverty has been defined as a situation where a population or a section of the population is able to meet only its
bare subsistence, the essentials of food, clothing and shelter, in order to maintain a minimum standard of living
(Balogun, 1999). The World Development Report (WDR) from the World Bank (1990) notes that conditions
could be described as poor if per capita income or consumption of the individual is below US $370 or very poor
if it is below US $275 at any time period. Englama and Bamidele (1997) aptly summarized the definition of
poverty, in both absolute and relative terms as a state where an individual is not able to cater adequately for
his/her basic needs of food, clothing and shelter, meet social and economic obligations; lacks gainful
employment, skills, assets and self-esteem; and has limited access to social and economic infrastructures. In
other words, the poor lacks basic infrastructure such as education, health, potable water, and sanitation, and as a
result has limited chance of advancing his/her welfare to the limit of his/her limited access to social and
economic infrastructures”. In other words, the poor lacks capabilities. The World Bank (1993) describes the
poverty line as the value of income or consumption necessary for (a) the minimum standard of nutrition and (b)
other “necessities.” The Human Development Index (HDI) of the United Nations Development Programme
(UNDP, 1996) introduced by the United Nations to give indication of poverty or prosperity level within a
society and globe, considers life expectancy at birth, adult literacy rate, combined primary, secondary and
tertiary enrolment ratio and the Real GDP per capita as factor indicators of interest. Oladunni (1999) notes that
poverty is a worldwide phenomenon; however, Nigeria is one of the poorest countries in the world. The


situation has reached an alarming stage as more than 45% of the population lives below the poverty line, while
67% of the poor are extremely poor. For example, the Bureau of Statistics‟ (BOS) report for the period 1980-
1996, indicates about 67 million Nigerians are living below the poverty level. The report also indicates that from
1980 to 1985,
The percentage of rural dwellers and urban inhabitants in the core poverty bracket rose from 6.5 and
3.0 percent to 14.8 and 7.5 percent, respectively. Within the same period, the percentage of moderately poor in
the rural areas rose from 21.8 to 36.6 percent and 14.2 to 30.3 percent, respectively. Also the number of non-
poor in both rural and urban areas dropped from 71.7 and 82.8 percent to 48.6 and 62.2 percent, respectively
(Awoseyila, 1999; Okumadewa, 1999). The increasing incidence of poverty in Nigeria within this period is not
surprising. Going by the documentaries of Oladunni (1999) the overall dependency ratio in Nigeria is 234
dependents per 100 gainfully employed persons. In the rural areas, it is 286 dependants per 100 workers, while
in the urban centre it is 219 dependants per 100 workers. The labor force age (between 15 and 64 years)
dependant ratio is 259 dependants per 100 workers nationwide. It is 302 and 222 dependants per 100 workers in
the rural and urban centers, respectively.. The above scenario works concertedly to further reinforce the poverty
syndrome of the average Nigerian employee, as each bears heavy economic burden of over 200 non-workers.
Poverty as noted earlier is not peculiar to Nigeria or developing nations alone, rather it has attracted
worldwide attention. Egwuatu (2008) documents over 500 million of the world‟s population lives under very
poor conditions, but they are economically active. They lack access to basic necessities of life: food, shelter and
primary health care. They earn their livelihoods by being self employed as micro entrepreneurs or by working in
micro enterprises (very small businesses which may employ up to 5 people). This set of people has no hope for
expansion of their enterprise because of inability or incapability of accessing banks for credit.
More than 80 percent of all households in developing countries do not have access to institutional banking
services. This is because they lack the collateral to secure loans from formal financial institutions. Besides, the
technical backing needed for creativity and enhanced productivity is absent. Ehigiamusoe (2008) notes that
microfinance assumes the poor know what to do to enhance their economic condition, but they operate from a
slim economic base which can be strengthened by funds borrowed on affordable terms.
Microfinance in Nigeria, though on informal setting is as old as the nation itself. Though the informal system is
a rural unregulated and unofficial financial arrangement, it has highly respected modus operandi by which
individuals or groups relate in their various capacities as debtors and creditors outside the regimented and
regulated markets. The informal financial market is classified into institutional and non-institutional markets. In
the non-institutional markets, the activities of savings and acquisition of credits are done by individuals on their
own or through person-to-person arrangement. The market includes self financing, financing by relations,
friends and well wishers, professional money lenders, jackpot, raffle and pool winnings, and trust system of
credit transactions. Institutional market on the other hand refers to any organizational or institutional
arrangement that aims at mobilizing savings and credits. Found in this market are the rotating savings and credit
associations (ROSCAs), thrift associations, savings mobilization groups (which are traditionally called Esusu,
bam bam, ajo, and adashi by different communities), daily savings or contribution organizations, co-operative
societies, religious organizations, social clubs and village or town unions. The informal system of advancing
credit irrespective of the meager amount it generates remains the major source of finance for the poor who see
the formal financial institution as being too bureaucratic, costly and cumbersome (Okpara, 1990). The
Government of Nigeria on its own has made several efforts at redressing the inadequate supply of financial
services to the poor. In 1936, government in support of the cooperatives promulgated the cooperative society‟s
ordinance. This made the cooperatives have regular/compulsory savings as one of their goals while thrift and
credit societies combined regular savings of members with lending. The Commercial Bill Financing Scheme in
1962 and the Regional commodity Boards (later called National Commodity Boards in 1977) were among the
efforts made by government to improve the poor‟s access to lending. The Nigerian Agricultural and Cooperative
Bank (NACB) was established in 1972 to act as development finance institution extending loans to both small
and large-scale farmers. A similar institution, the Agricultural Credit Guarantee Scheme Fund (ACGSF) was
established in 1978 for the purpose of agricultural risk reduction. The bank guarantees up to 75% of the
principle in case of default due to natural events beyond the control of the farmers. Others are the Rural Banking
System of 1977, where banks were required to establish a specified number of branches in identified rural areas.
Export Financing Rediscount Facility in 1987, measured rural credit markets, including the sectoral allocation of
credit, specified percentage of total deposits mobilized in the rural areas to be lent to borrowers in such areas,
concessional interest and grace periods on agricultural loans. However, some of these measures were abolished
with the introduction of liberal economic policies in 1989. The Peoples Bank established in 1989 for the same
purpose, was charged with the responsibility of taking deposits and lending to the poor. There was also licensing
of community banks in the 1990s for the provision of non-sophisticated loans to the community. Community
Bank metamorphosed into the recent Microfinance Bank in 2005. Some of these efforts were frustrated by lack
of managerial wherewithal, lack of supervision, mischannelling of credit facilities, bribery and corruption
(Olaitan 2001; Adeyemi, 2008).


III. Women Involvement And Micro-Finance In Nigeria.
Nigerian is the seventy world largest exporter oil, yet ranks 158 out of the 188 countries of the world in
terms of quality of life (UNDP, 2007). Available statistics indicate that poverty has become endmic in Nigeria
and is on the increase. About two third of the Nigeria‟s population (about 150 million) are poor (UNDP, 2007).
Out of these numbers of poor Nigerian, women represent greater proportion due largely to their ascribed and
acquired role: for instance, about 65 percent of active population, most of them women have been excluded
from formal financial institutions (Bamisile, 2006).
The increased focus on gender and development debate has been an important development of the last
three decades. According to UNECA (2005) cited in Yeshiareg (2009), one of the reasons why Africa is off
track in terms of meeting the millennium development goal targets, includes persistent gender inequality and
discrimination. The current challenge facing the cantment (Africa) and Nigeria in particular is how to achieve a
reversal of inequalities. Emergence of Micro Finance Bank was largely aggravated by the exclusion of the
informal sector by the formal financial system in Nigeria and indeed other developing countries. Thus, the
Micro Finance Banks are primarily established to fill the gap created by the formal financial institutions.
Anyanwu (2004), summarizing the objectives of Micro Finance Bank to include: improvement of the
socioeconomic conditions of women, especially those in the rural areas through the provision of loan assistance.
This role has become necessary in Nigerian in order to foster the living standard of women that are heavily
disenfranchised by the formal banking system due largely to the perceived and real high risk and cost associated
with serving the poor. Corroborating this view, Anyanwu (2004) opined that a particular example in Nigeria is
that women suffer the disability of non access of bank credit, yet such credit removes constraints and poverty.

IV. Microfinance Bank And Standard Of Living
Income is one of the important elements of living standard of the poor people as well as saving.
Mohammed and Mohammed (2007) The Microfinance Banks are to provide loans to the poor
not only the increase their income but also to mobilize their savings CBN, (2005). Apart from these other factors
that contribute to human development, like education, empowerment are also included as variables indicating a
level of standard of living. This study endeavor to explore and find out to what extent the standard of living of
hairdresser in Oshodi/Isolo Local Government has been influenced since they joined the microfinance program.
Microfinance programs target both economic and social poverty, and in essence it is important to assess the
success of Microfinance Bank. And according to Ghalid (2009), there need to measure the impact on borrowers,
whom in this study are the hairdresser in Oshodi/Isolo local Government. Mohammad and Mohammed (2007)
opined that Microfinance Bank interventions promote living condition of poor people by offering supportive
service. These supportive services are important indicators of the human development. Mohindra et al (2005),
cited in Mohammad and Mohammed (2007) said Microfinance Banks micro credit helps to empower in society,
especially among the women clients. Traditionally, development initiatives are synonymous with raising
people‟s incomes, employment opportunities, consumption, building of assets and accumulating savings. Impact
assessment studies look for indicators and variables that measure prosperity no terms of material and tangible
assets that can be awarded numeric values such as increased income, greater employment ownership of physical
assets (Ghalid 2009).

V. Methodology
The data that would be generated for the purpose of this research study is be basically primary data that
would be used in generating questionnaire which will be administered to the members of hairdressers who
registered with Oshodi Isolo LGA.
However, the study population comprises 120 hairdressers who registered with Oshodi Isolo LGA and
it is made up of male and female altogether. More so, the population also has different material status from
single to married employees.
However, Spearman‟s rank correlation coefficient will be adopted in this study. Spearman's rank
correlation coefficient or Spearman's rho, named after Charles Spearman and often denoted by the Greek letter
(rho) or as, is a non-parametric measure of statistical dependence between two variables. It assesses how well
the relationship between two variables can be described using a monotonic function. If there are no repeated
data values, a perfect Spearman correlation of +1 or −1 occurs when each of the variables is a perfect monotone
function of the other. Therefore Spearman's coefficient can be used when both dependent (outcome; response)
variable and independent (predictor) variable are ordinal numeric, or when one variable is a ordinal numeric and
the other is a continuous variable. However, it can also be appropriate to use Spearman's correlation when both
variables are continuous and the formular is as follows;
R = 1- 6∑d2
n (n2-1)
Where d = the difference between the ranks of each pair.
n = number of paired observations

Correlation Range Strength of Association
+ 0 .70 to + 1.00 Strong
+ 0.40 to + 0.69 Moderate
+ 0.25 to + 0.39 Weak
+ 0.10 to + 0.24 Very Weak
+ 0.00 to + 0.09 None
Source: Nyang, (2005).

VI. Research Hypotheses
Hypothesis One
Null Hypothesis (Ho); Microfinance bank in Oshodi Isolo has not impacted greatly on the
Business of hairdressers in the local Government.
Alternative Hypothesis (H1): Microfinance bank in Oshodi Isolo has impacted greatly on the
Business of hairdressers in the local Government.

Hypothesis Two
Null Hypothesis (Ho): Microfinance has no significant effect on asset acquisition and savings of
hairdressers in that Oshodi/isolo local Government.
Alternative Hypothesis (H1): Microfinance has a significant effect on asset acquisition and savings of
hairdressers in that Oshodi/isolo local Government.

VII. Result
Data Presentation And Analysis, Analysis Of Questionnaire

Table 1
Sex Distribution
Source: Field Survey 2012
Responses Frequency Cumulative Percentage Responses Frequency Cumulative Percentag
Frequency Frequency e
Male 22 22.0 18.33 Single 28 28.0 23.33
Female 98 120.0 81.67 Married 92 120.0 76.67
Total 120 100.0 120 100.0

From the result the result above, 22 out of 120 respondents are male and this gives 18.33% of the whole
respondents and 98 out of 120 respondents and this represent 81.67% of the total respondents. We can then
conclude from the analysis above that there are more male respondents in the research study.
More so, it was also known from the result above that 28 out of 120 respondents are single and this constitutes
23.33% of the whole respondents while 92 out of 120 respondents are married and this gives 76.67% of the total
respondents. Therefore we can conclude that there are more single respondents in the research than married
respondents.

TABLE 2
AGE DISTRIBUTION
Cumulative
RESPONSES FREQUENCY Percentage
Frequency
Below 25 years 41 41.0 34.17
Between 25-35 years 44 85.0 36.67
Between 36-45 years 21 106.0 17.50
46 and above 14 120.0 11.66
Total 120 100.0
Source: Field survey 2012
The table above revealed that 41 respondents are below 25 years and this represents 41% of the total
respondents while 44 respondents are between age 25-35 years and this gives 36.67% of the total respondents.
However, 21 respondents are between age 36-45 years and this gives 17.50% of the whole respondents while 14
respondents are between the age of 46 and above years and this constitutes 14% of the total respondents. From
the above analysis we can then deduced that respondents between 25-35 years of age are more in the research
study.

TABLE 3
EDUCATIONAL QUALIFICATION DISTRIBUTION
Cumulative
RESPONSES FREQUENCY Frequency Percentage

WAEC 73 73.0 60.83
NCE/OND 27 100.0 22.50
HND/B.SC 20 120.0 16.67
M.Sc./MBA - - -
Total 120 100.0
.
The Table above shows that 60.83% of the total respondents has West African Examination Council (WAEC)
qualification while 22.50% of the whole respondents has an National College of Education/ Ordinary National
Diploma (NCE/OND) qualification. However, 16.67% of the total respondents has Higher National Diploma/
Bachelor of Science (HND/B.SC) qualification while nobody has Masters degree (M.Sc/MBA), therefore we
can then conclude that respondents with West African Examination Council (WAEC) qualification are more in
the research study.

TABLE 4
ANALYSIS OF RESPONDENTS BY NUMBER OF YEARS IN BUSINESS
RESPONSES FREQUENCY Cumulative Frequency Percentage
Less Than 1 year 13 13.0 10.83
1-5 years 46 59.0 38.33
6-10 years 53 112.0 44.17
11 years and 8 120.0. 6.67
Above
above
Total 120 100.0
Table 4 above shows that 10.83% of the total respondents have less than a year experience in the business while
38.33% of the whole respondents have between 1-5 years experience in the business of hairdresser. However,
44.17% of the total respondents has 6-10 years experience in the business of hairdresser while 6.67% of the
whole respondents have 11 years and above, therefore we can then conclude that respondents with 6 -10 years
and above in the business of hairdresser are more in the research study.

TABLE 5
RESULT OF GENERAL QUESTIONS DISTRIBUTED TO THE RESPONDENTS
Questions Response Frequency Cumulative Percentage (%)
Frequecy
Savings of your Members has COLUMN
Increased SA 90 90.0 75.00
SD 10 100.0 8.33
A 5 105.0 4.17
D 10 115.0 8.33
U 5 120.0 4.17
Interest rates charged by the SA 80 80.0 66.67
Micro-finance bank is SD 20 100.0 16.67
resemble A 10 110.0 8.33
D 10 120.0 8.33
U -
Through better asset SA 120 120.0 100.0
acquisition, your Income has SD -
increase A -
D -
U -
Procedure for obtaining SA 107 107.0 89.17
Loan is very easy SD 13 120.0 10.83
A -
D -
U -
Microfinance has improved SA 120 120.0 100.0


your members standard of SD -
living. A -
D -
U -
Majority of your member has SA 20 20.0 16.67
Better access to SD 83 103.0 69.16
Education A -
D 17 120.0 14.17
U -

Employment opportunities SA 120 120.0 100.0
increases SD -
A -
D -
U -
Microfinance Programme has SA - - -
increased the self-sufficiency SD 118 118.0 98.33
of your member (hairdresser) A -
in oshodi-isolo local D 2 120.0 1.67
Government. U -
-
Total 120 100.0
Where SA- Strongly Agree, SD- Strongly Disagree, A- Agree, D- Disagree, U- Undecided.

VIII. Result Of Spearman’s Rank Correlation Coefficient For Research Hypothesis I And Ii
Q1 Q9 Q1 Q9
Spearman‟s rho Q1 1.000 .811** 1.000 .771**
Correlation Coefficient Sig. (2-
tailed)
N 120 120 120 120

Q9 Correlation C .811** 1.000 .771** 1.000
N 120 120
120
Source: SPSS Package
Decision Rule: If the Spearman‟s rank correlation H calculated is greater than Spearman‟s rank correlation H
tabulated, we accept the alternative hypothesis and reject the null hypothesis. The tabulated value use here is
5% level of significance that is ** P 0.05 and vice versa. However, from the spearman's rank correlation
coefficient results for research hypothesis one, and two value is given as 0.811 and 0.771 which means there is a
positive and strong relationships is established, therefore since the spearman‟s rank correlation coefficient
calculated values (0.811, 0.771) are all greater than Spearman‟s rank correlation coefficient tabulated value
using 5% level of significance ** P 0.05 we then accept alternative hypothesis in the two hypotheses
and reject the null hypotheses in the two hypotheses, then conclude that Microfinance bank in Oshodi Isolo has
impacted greatly on the Business of hairdressers in the local Government and that Microfinance has a significant
effect on asset acquisition and savings of hairdressers in that Oshodi/isolo local Government.

IX. Discussion
From the study on the impact of Micro Finance Bank on standard of living of hairdresser in Oshdi/Isolo
Local Government, the analyzed data showed that the source of start up capital of many of the hairdresser is as
follows: majority got their start up capital form personal contribution, Examining the savings of the members,
75% strongly agree that they have savings account while 66.67% of the whole respondents said the interest rate
charged by the microfinance .bank is nearly the same from one microfinance to the other. However, the whole
respondents (100%) agree with the notion that through better asset acquisition, their income has increase
overtime, 89.17% of the respondents believe that the procedure for obtaining loan from Micro Finance Bank is
easier than that of Commercial Banks in Nigeria. However, this study also confirms the study of impact of
Micro Finance Bank by Mohammad and Mohammed (2007).
However, Microfinance has improved the standard of living of the hairdresser association in
Oshodi/Isolo and this gives 100% of the total respondents while low members of the association have better
access to education and in the long run employment opportunities increases overtime. More so, majority of the


respondents strongly agree that Microfinance programme has not increased the self-sufficiency of their member
(hairdresser) in Oshodi/Isolo local Government.
In conclusion, microfinance bank has given hope to the poor by improving their standard of living in
Nigeria than the commercial banks where in the case of paying the loan plus the capital out of the original
capital did not leave room for better access for education nor better financial situation of their family and hence
left many poorer than before collecting of the Micro Credit thereby reduced their standard of living.

X. Conclusion And Recommendations
Despite the laudable impact of Micro Finance in many part of world, (Yunus, 1999; Kehinde, 2006;
Mohammad Mohammed, 2007) the impact was seriously felt a bit in Oshodi/Isolo local Government area of
Lagos state, and it has reduce the rate of poverty and standard of living has been enhanced to some certain
extent. In view of the problems encountered above, we recommend that the government through the Apex bank
(Central Bank of Nigeria) should ensure that Microfinance, Bank loans are extended to the poor without too
much strict deposit condition. However, the interest rate that will be charged on the loans should be lower than
that of commercial banks to enable them to be able to repay both interest and money borrowed and the
repayment should include a grace period and reasonable schedule instead of weekly payment that is commonly
found among the Microfinance Bank.

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