COVID-19 and Microfinance Banks in Nigeria

This study investigated the effects of COVID-19 pandemic on the activities and performance of microfinance banks with special focus on South West Region of Nigeria. Data were collected from 100 heads of department selected from 20 randomly picked microfinance banks. Data were analyzed with simple percentage and regression technique. It was discovered that, COVID-19 impedes the activities of microfinance banks through loans repayment, deposit mobilization, customers, patronage, operational efficiency, and nonperforming loans. The study concluded that, COVID-19 imposed constraints on the activities of microfinance banks which negatively affect financial performance. It was suggested that, there is need for quick response of regulatory authorities to microfinance banks. Financial and regulatory supports should to stop the declining activities of microfinance banks because microfinance banks play supporting role to small business and less privilege in the economy. There is need for the digitization of microfinance banks' activities to cushion the negative effects of future pandemic. Periodic review should be undertaken to monitor and uncover threats in the loan portfolios, liquidity position, and financial statements of MFBs for quick policy initiatives and innovations.