MEDIATING EFFECT OF ENTREPRENEURIAL SKILLS ON THE RELATIONSHIP BETWEEN MICRO FINANCE BANK INTERVENTIONS AND THE PERFORMANCE OF WOMEN-OWNED ENTERPRISES IN NORTH EASTERN NIGERIA.

CHAPTER ONE INTRODUCTION 1.1 Background of the Study The role of women in fostering economic development has gained significant attention in recent decades, particularly in developing countries. According to Nwoye (2022), Nigerian women have tremendous capacity as human resources and in conventional society, women in a bid to support their families have been indirectly or directly involved in entrepreneurship either through farming, fishing, weaving textiles, processing farm products and trading in the markets, thereby contributing to economic growth. Abiona (2011) noted that Nigerian women have been engaged in entrepreneurial activities for many decades, but their contributions have consistently gone unacknowledged. They have exchanged products both in their local communities and surrounding markets. And more often than not, family survival has often depended on a woman’s enterprising ability (Abiona, 2011). At global recognition, Wrld bank (2020) reckoned that Women-owned enterprises serve as critical drivers of economic growth, poverty reduction, and social transformation, contributing significantly to household incomes and national economies (World Bank, 2020). Irrespective of women's perseverance in entrepreneurship, there have been a number of factors impeding their success. Claudia (2022) stated that, like their male counterparts, women in small businesses experience business breakdown because of the shortcomings influencing business performance, which are: inadequate financial resources, poor location, insufficient management experience and lack of entrepreneurial skill. As stated by Awoke (2022), the performance of women-owned MSEs has been persistently influenced by numerous factors like; education level, business experience, marketing factors, cultural factors, motivational factors, and institutional factors-even a significant number of women’s interest in business show some escalation in Nigria, but their success is still insignificant. These challenges according to Husseni (2020) are particularly pronounced in developing countries marked by socio-economic disparities, insecurity, limited access to finance, inadequate entrepreneurial skills, and unfavorable socio-economic condition. To counter these challenges and encouragement of the entrepreneurial development, microfinance has emerged a vital strategy. Initially, The ultimate goal of microfinance is to make impoverished people self-sufficient.. Microfinance banks provide financial services, particularly microcredit, to people who have been systematically excluded from accessing such services by the formal financial institutions. This financial institution offers microcredit, micro-savings, and micro-insurance among others to its customers (Agbim, 2020). Since inception its inception in 1970's, Nigeria has incorporated into its practice, social and economic development concepts, as well as principles that underlie financial and commercial markets. According to Gabriel (2023) the role of microfinance enterprises is particularly important in Nigeria, where businesses either small. Medium or large scale is a significant contributor to national GDP and a source of employment for a large portion of the population . Microfinance banks have implemented diverse interventions, such as training programs, advisory services, and business network meetings, to support entreprenuers at different levels Training programs, for instance, are designed to enhance the knowledge and managerial skills entrepreneurs, equipping them with the tools necessary to overcome business challenges. Advisory services further provide personalized guidance to improve decision-making and strategic planning. Monitoring efforts by microfinance banks aim to ensure proper utilization of resources and adherence to business objectives, while business network meetings foster collaboration and knowledge sharing among entrepreneurs. Regardless of the effectiveness of MFB interventions in improving the performance of women-owned enterprises mediating factors as entrepreneurial skills has become a source of concern. Entrepreneurial skills encompass a range of abilities, including business planning, financial literacy, risk management, and innovation, which are critical for the success of small enterprises. Entrepreneurial skills serve as the foundation for leveraging microfinance interventions effectively, ensuring that financial and non-financial support translates into tangible outcomes. For instance, training programs and advisory services may fail to yield desired results if women entrepreneurs lack the requisite skills to apply acquired knowledge in real-world scenarios. Similarly, monitoring efforts and business network meetings are only impactful when women entrepreneurs possess the capabilities to implement feedback and seize networking opportunities. Contextually, North Eastern Nigeria, with its unique socio-cultural and economic dynamics, presents a compelling context for examining these relationships. The region is characterized by high levels of unemployment, gender inequality, and limited economic opportunities for women, further exacerbated by years of insurgency and instability. Women entrepreneurs in this region often operate in informal sectors, relying on microfinance banks for both financial and non-financial support. Therefore this study seeks to examine how entrepreneurial skills mediate the impact of microfinance interventions on women owned women-owned enterprises in North Eastern Nigeria. 1.2 Statement of the Problem Recently, many women-owned enterprise in Nigeria continues to struggle with inefficiencies, little market share, low sales which hinders their performance. Aliyu (2022) argued that even though the microfinance strategy has been adopted in all regions, providing access to credit and saving to entrepreneurs, the performance of many women-owned enterprises remains suboptimal. This raises critical questions about the mediating variables influencing the effectiveness of MFB interventions. Ukonu (2022) argued that while microfinance banks have been instrumental in providing financial and non-financial support to women entrepreneurs, the effectiveness of these interventions in translating into measurable improvements in enterprise performance remains inconsistent. The gap between intervention programs and tangible business success raises critical concerns about the underlying factors influencing the outcomes of such initiatives. Research by Nnnadi & Geofy (2020) suggests that non-financial interventions, such as training programs, advisory services, and monitoring, have the potential to enhance the performance of women-owned enterprises when implemented effectively. However, in North Eastern Nigeria, the impact of these interventions often falls short of expectations due to inadequate entrepreneurial skills among women entrepreneurs. For instance, women entrepreneurs with inadequate financial literacy or business planning skills may struggle to utilize microfinance loans effectively, leading to subpar business outcomes. Another pressing issue is the limited adoption of information technology (IT) by women entrepreneurs in North Eastern Nigeria. In a rapidly evolving global economy, the integration of IT has become essential for accessing broader markets, improving operational efficiency, and fostering innovation. However, many women-owned enterprises in the region struggle to incorporate IT into their operations, largely due to a lack of skills and resources. This technological gap further inhibits their ability to compete effectively, limiting their growth potential and overall contribution to regional development. Existing studies have largely focused on the direct impact of microfinance services on enterprise performance, with limited attention to mediating factors such as entrepreneurial skills. Without the necessary skills to apply knowledge gained through training and advisory programs, the sustainability of enterprises remains questionable. This gap in entrepreneurial competency not only undermines the effectiveness of microfinance interventions but also contributes to the stagnation of many women-owned businesses in the region. 1.3 Objective of the Study The main objective of the study is to examine the mediating effect of entrepreneurial skills on the relationship between micro finance bank interventions and the performance of women-owned enterprises in North Eastern Nigeria. The specific objectives are to: i. Examine the effect of training programs on the performance of women-owned enterprises in North Eastern Nigeria. ii. Assess the effect of advisory services on the performance of women-owned enterprises in North Eastern Nigeria. iii. Examine the effect of monitoring on the performance of women-owned enterprises in North Eastern Nigeria. iv. Assess the effect of business network meetings on the performance of women-owned enterprises in North Eastern Nigeria. v. Examine the effect of information technology on the performance of women-owned enterprises in North Eastern Nigeria. vi. Assess the effect of entrepreneurial skills on the performance of women-owned enterprises in North Eastern Nigeria. vii. Examine the mediating effect of entrepreneurial skills on the relationship between microfinance bank interventions and the performance of women-owned enterprises in North Eastern Nigeria 1.5 Research Question i. What is the effect of training programs on the performance of women-owned enterprises in North Eastern Nigeria? ii. What is the effect of advisory services on the performance of women-owned enterprises in North Eastern Nigeria? iii. What is the effect of monitoring on the performance of women-owned enterprises in North Eastern Nigeria? iv. What is the effect of business network meetings on the performance of women-owned enterprises in North Eastern Nigeria? v. What is the effect of information technology on the performance of women-owned enterprises in North Eastern Nigeria? vi. What is the effect of entrepreneurial skills on the performance of women-owned enterprises in North Eastern Nigeria? vii. What is the mediating effect of entrepreneurial skills on the relationship between microfinance bank interventions and the performance of women-owned enterprises in North Eastern Nigeria? 1.6 Significance of the Study for microfinance institutions, This study holds immense practical significance for microfinance institutions, particularly in North Eastern Nigeria. By identifying the mediating role of entrepreneurial skills in the relationship between microfinance interventions and the performance of women-owned enterprises, the study offers actionable insights for designing and implementing more effective support programs. Microfinance banks can tailor their training, advisory, and monitoring services to address specific skill gaps, ensuring that women entrepreneurs are better equipped to maximize the benefits of these interventions. Additionally, the study underscores the importance of integrating information technology and networking opportunities into support programs, enabling women-owned enterprises to thrive in a competitive and digital economy. for policymakers and development agencies, the findings are also vital focusing on women's empowerment and regional development. By highlighting the critical role of entrepreneurial skills in driving the success of women-owned businesses, the study provides evidence to support the formulation of policies that prioritize skill development as a key component of economic empowerment initiatives. This could include subsidized training programs, mentorship schemes, and partnerships with technology providers to enhance the capacity of women entrepreneurs. Such targeted interventions can help reduce unemployment, improve household income, and foster sustainable economic growth in the region. Furthermore, women entrepreneurs themselves stand to benefit directly from the insights provided by this study. By understanding the importance of entrepreneurial skills, women business owners can take proactive steps to improve their competencies in areas such as business management, IT integration, and networking. The study encourages women entrepreneurs to seek out training opportunities, engage in business networks, and leverage technological tools to enhance their operational efficiency and market reach. This empowerment has the potential to transform women-owned enterprises into sustainable and thriving ventures, contributing to the overall development of North Eastern Nigeria. Empirically, the study makes a significant empirical contribution to the existing body of knowledge on entrepreneurship, microfinance, and women-owned enterprises. It fills a critical gap in the literature, particularly in the context of North Eastern Nigeria, where research on the intersection of microfinance interventions, entrepreneurial skills, and women-owned enterprises is limited. The findings will serve as a valuable resource for researchers, scholars, and academicians, providing a foundation for further empirical studies and contributing to the global discourse on women's entrepreneurship and economic 1.7 Scope of the Study This study is delimited to women-owned enterprises operating within the North Eastern states of Nigeria, with emphasis on small and medium-scale ventures actively engaged in commercial activities. It focuses on the interventions of microfinance banks such as credit facilities, savings schemes, and advisory services, and how these influence enterprise performance. The scope further covers entrepreneurial skills including financial literacy, opportunity identification, risk management, and business planning, and their mediating role in enhancing enterprise growth. The study does not extend to large corporations or enterprises outside the North East geopolitical zone. 1.8 Limitation of the Study The study encountered limitations that may influence the generalizability of findings. Data collection was restricted to women entrepreneurs with access to microfinance services, thereby excluding women who operate without such support. Financial and time constraints limited the coverage of all enterprises across the six states of the region, leading to reliance on representative samples. Additionally, responses were based on self-reported information, which may be affected by recall bias or reluctance to disclose sensitive financial details. Despite these limitations, adequate measures were taken to ensure reliability and validity of results. 1.9 Definition of Terms Microfinance Bank Interventions: Financial and non-financial services such as credit, savings, and advisory support offered by microfinance banks to entrepreneurs. Entrepreneurial Skills: Knowledge and competencies including financial literacy, risk management, innovation, and business planning that enable entrepreneurs to manage enterprises effectively. Performance of Women-Owned Enterprises: The growth, profitability, and sustainability of businesses established and managed by women. Mediation Effect: The role played by an intervening variable (entrepreneurial skills) in explaining the relationship between microfinance interventions and enterprise performance.