| dc.description.abstract | The researcher attempted to assess the effectiveness of Bank of Agriculture (BOA)
microloan scheme on job creation among micro and small enterprises. This is in view of
the unprecedented rise in the unemployment rate in Nigeria and the widely perceived
belief that among other policies, harnessing the financial capacity of micro, small and
medium enterprises (MSMEs) may possibly dictate the pace of the country’s
achievement of job creation. Despite a wide array of studies on MSME growth, only a
handful of rigorous studies are available to provide evidence of the effect of finance on
labour market outcomes in the sector, as well as on the use of more relevant assessment
techniques on the performance of public policies and interventions related to MSME
financing.
Through the use of mixed methods including questionnaire administration, key informant
interviews, focused group discussions and desk research, this research undertook a theory
of change-based assessment of Bank of Agriculture microfinance scheme, to assess the
extent to which the scheme is effective in contributing to the achievement of the MSME
Policy’s fundamental objective of job creation. Descriptive statistics using frequency
tables and graphs as well as OECD COTE (Coherence, Objectives, Targets and
Evaluation) Framework for policy formulation were applied as methods of analysis.
The findings show a fundamental flaw in relation to the lack of strategic alignment of the
Bank of Agriculture (BOA) operations with the MSME Policy. The Bank is seen to be
operating in a silo as the strategic direction the MSME tilt does not seem to derive from
the overall MSME Policy. BOA is also not seen to be positioned to engage the practice of
performance measurement and reporting generally and in particular of the fundamental
objective of job creation, as stipulated in the MSME Financing Policy of government.
It was also revealed that a majority of enterprises that took BOA microloans loans were
not able to create jobs as many of them were operating as “survivalists”. Although the
BOA microloan scheme is potentially capable of supporting targeted growth-oriented
microenterprises in specific trades to create jobs, given the attractive concessional terms,
the Bank is not achieving this objective in its present state and form neither is it seen to
be positioned to do so due to several supply and demand side factors. An ongoing reform
process in the Bank during this research period may be able to address part of this
concern if more strategic steps are taken to surmount the constraints.
Furthermore, BOA does not have a functional performance measurement framework and
monitoring and evaluation system that can be used as the basis for measuring goal
attainment such as the goal of job creation, especially in relation to the outcomes of the
provision of financial services to the MSME sector.
For BOA to be successful and truly developmental in focus especially in relation to its
contribution to the strategic objective of job creation, the study therefore recommended
the key thrust of a new framework for addressing the current unemployment situation to
include an effective alignment of macro, meso (sectoral) and micro policies.
At the (micro) institutional level, it is recommended that BOA should:
• improve its governance and management system as well as the integration of
development impact considerations and measurement;
• create innovative financing products for growth-oriented microenterprises
especially through cluster financing and cluster-based development;
• increase wholesale lending through the provision of on-lending products to
performing microfinance institutions (MFIs);
• engage the services of BDS organisations to source for credible clients and build
clients’ entrepreneurial capacity including assisting them to access markets.
In line with the need to integrate development impact considerations and measurement
into its entire operations, the researcher designed a monitoring and evaluation framework
that can enhance the tracking of the attainment of job creation policy goal in BOA
microloan scheme. In this vein, the institution is to adopt formal “lessons learnt”
mechanisms to integrate evaluation findings into future activities and “put development
back into development banking” (Smallridge, 2017).
At the meso level in the study context, horizontal cooperation is recommended where all
relevant institutions are aligned and the impact of various policy measures on
entrepreneurship and job creation are taken into account. Lastly, an employment –
sensitive macro-economic framework must pursue: the relaxation of monetary and credit
conditions that are supportive of employment creation in the economy; fiscal prudence in
the context of exploiting fiscal space to accommodate investments with high employment
potentials; use of legislative mechanisms for ensuring full and effective implementation
of annual budgets, program and projects at all levels and development and effective use
of computerised Labour Market Information System (LMIS) for Nigeria. | en_US |
