Impact of Microfinance on Small Business Growth: Evidence from Women Entrepreneurs in Kano State

This study examines the impact of microfinance credit on the growth of small businesses owned by women entrepreneurs in Kano State, North West Nigeria. Women-owned micro and small enterprises in Kano face intersecting challenges of limited collateral, restricted mobility, and social capital constraints that limit their access to conventional banking finance, making microfinance institutions a critical intermediary for female entrepreneurial development. The study employs a descriptive survey design, drawing on a sample of 180 women entrepreneurs who had received microfinance loans from registered microfinance banks in Kano Municipal and Dala Local Government Areas within the preceding two years. A structured questionnaire measured business growth indicators including turnover change, employment size change, asset acquisition, and market expansion. Data were analysed using descriptive statistics and Pearson correlation. Findings indicate that microfinance credit positively and significantly correlates with improvements in business turnover and asset value, with borrowers reporting average turnover increases of 34 percent over the loan period. However, employment growth is modest, with most beneficiaries hiring family members rather than paid workers. Loan sizes are identified as a binding constraint, with the majority of respondents reporting that single loan disbursements were insufficient for planned business expansion. Interest rates are identified as a secondary concern. Recommendations include the development of graduated microfinance products that increase loan size over successive successful repayment cycles, and mandatory business development training as a condition of loan eligibility. Keywords: microfinance, women entrepreneurs, small business growth, Kano State, business finance.