The Effect of Microfinance on Small Business Growth in Kano State

Microfinance institutions have emerged as critical enablers of economic inclusion in Nigeria, particularly in the North West geopolitical zone where access to conventional banking remains constrained. This study examines the effect of microfinance on small business growth in Kano State, focusing on businesses that accessed credit facilities from licensed microfinance banks between 2020 and 2024. The research adopts a descriptive survey design, drawing on primary data collected from 200 small business owners selected through stratified random sampling across five local government areas in Kano metropolis. A structured questionnaire was used as the primary data collection instrument, and data were analysed using descriptive statistics and simple regression analysis. The study is anchored on the financial intermediation theory and the poverty alleviation framework proposed by recent development economists. Preliminary findings from existing literature suggest that microfinance access improves business turnover, asset acquisition, and employment creation among beneficiaries. However, challenges such as high interest rates, short repayment tenors, and limited financial literacy continue to undermine potential gains. This research contributes to the growing body of literature on grassroots finance in northern Nigeria, offering evidence-based insights for policymakers and microfinance practitioners. The findings are expected to inform regulatory improvements and programme design for institutions operating in semi-urban and rural Kano communities. Keywords: microfinance, small business growth, Kano State, financial inclusion, credit access