Strategic Financial Management and Long-Term Survival of Nigerian Microfinance Banks

This study examines the relationship between strategic financial management practices and the long-term survival of microfinance banks in Nigeria. Microfinance banks play a pivotal role in financial inclusion but face high attrition rates linked to poor financial strategy. The research targets the North West and South East zones, which host significant concentrations of licensed microfinance institutions. A descriptive survey design was employed, and data were collected from chief finance officers and managing directors of twenty microfinance banks using structured questionnaires. Analysis was conducted using descriptive statistics and survival analysis methods. Findings reveal that microfinance banks with deliberate capital adequacy management strategies, diversified loan product portfolios, and systematic non-performing loan recovery mechanisms demonstrate significantly higher survival probabilities over five-year periods compared to those focused solely on loan disbursement growth. The study also identifies interest rate management and reserve fund discipline as critical financial strategy components for sector survival. Regulatory compliance adherence to Central Bank of Nigeria prudential guidelines is found to be a strong predictor of institutional longevity. The research concludes that Nigerian microfinance banks must adopt professional strategic financial management frameworks aligned with CBN prudential requirements to improve sector survival rates. Keywords: strategic financial management, microfinance banks, Nigeria, financial inclusion, long-term survival.