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other indices such as credit performance of the bank and portfolio by category indicate that microfinance banking in the country may be heading to the right direction except for grossly inadequate portfolio allocation of 6% for Agriculture which is supposed to be in the driving sit of the food security and employment generation. In trying times for institutions such as Microfinance Banks which bear benefits to the masses， it is recommended that either or both the regulatory body or/and the institution should publish a hopegiving-information that will dispel the possibility of the public completely losing hope in such institutions. And also calculated attempt be made to reform the land use act of March 1978 coupled with insurance provision for farmers to ease access to fund.
Key words： Credit performance； Performing loan； Pass and watch； Substand； Doubtful； Loss； Portfolio growth； Link relative； Portfolio by category
1. INTRODUCTION
Robust economic growth cannot be achieved without putting in place well focused programs to reduce poverty through empowering the people by increasing their access to factors of production， especially credit. The dormant capacity of the poor for entrepreneurship would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant； increase employment opportunities， enhance household income， and create wealth. Microfinance is about providingfinancial services to the poor who are traditionally not served by the conventionalfinancial institutions.
According to [2]， three features distinguish microfinance from other formalfinancial products. These are： （i） the smallness of loans advanced and or savings collected， （ii） the absence of asset-based collateral， and （iii） simplicity of operations. In Nigeria， the formalfinancial system provides services to about 35% of the economically active population while the remaining 65% are excluded from access tofinancial services. These 65% are often served by the informalfinancial sector， through Non-Governmental Organization （NGO） - microfinance institutions， moneylenders， friends， relatives， and credit unions [4].
2. DEFINITIONS OF MICROFINANCE
According to [2]， Microfinance is the provision of a broad range offinancial services such as deposits， loans， payment services， money transfers， and insurance to poor and low income households and their micro enterprises. Microfinance services are provided from three types of sources； formal institutions， such as rural banks and corporative； semi-formal institutions such as non-governmental organizations； and informal sources such as money lenders and shopkeepers. Institutional microfinance is defined to include Microfinance services provided by both formal and semi-formal institutions. Microfinance institutions are defined as institutions whose major business is the provisions of microfinance services [5].
The concept of microfinance was examined from another perspective by Robinson [6]， who defined it as small scalefinancial service primarily credit and saving， provided to people who farmfish or herd， who operate small enterprises or micro enterprises where goods are produced， recycled， repaired or sold； who provide services； who work for wages or commissions， who gain income from renting out small amounts of land， vehicles， draft animals， or machinery and tools； and to other individuals and groups at the local levels of developing countries both rural and urban. This definition is encompassing as it fully indicates those who may benefit from microfinance institutions and also inform that developing countries need microfinance institutions than developed countries.
Otero and Rhyne [7] describe microfinance as a revolution that involves the large scale provision of small loans and deposit services to low income people by secure， conveniently located and competing commercialfinancial institutions thereby generating the process needed to democratize capital. This definition means that the members of microfinance institutions should be large enough to meet the needs of low income earners in the nation through the provision of deposit and loan facilities and to give room for health competition among them.
3. CONCEPTS AND TERMS RELATING TO MICROFINANCE INSTITUTIONS
Microcredit： Microcredit is a concept that has gained wide spread acceptance by international development agencies and major donors. It is viewed as a way to correct both governmental and market failure in sub Saharan Africa. Many view microcredit as a method for linking the formal and informal sector of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through microcredit is possible and desirable depending on macroeconomic reforms， respect for traditionalfinancing relationships and local control of institutions. However， very little has been done to determine the extent to which microcredit programs actually increase economic well being. Many of the loans， especially those made to women， are made using microcredit techniques， such as group lending [9]. Loans are targeted at the economically active poor - those not employed in the formal sector of the economy. 6. REASONS FOR DEVELOPMENT OF MICROFINANCE IN NIGERIA ECONOMY
According to Yaron [10]， the followings contribute to the reasons for establishing microfinance institutions in Nigeria：
Firstly， the concluded consolidation among conventional banks in Nigeria has systematically put to an end， more or less family banks. As a result 89 conventional banks in Nigeria were reduced to 26 by the end of December 31， 2006. With this， the CBN has opened another window C microfinance banks， with no restriction for the ownership of banks.
Secondly， Nigeria has remarkable entrepreneurs who need supports at every level and this includes micro， small and medium enterprises as well as big businesses. A common characteristic of these enterprises is their need for goodfinancing. Therefore， the provision of strong， competitive and well regulatedfinancial sectors， which will provide these categories of entrepreneurs with the much neededfinance apart from the conventional banking institution， has become very important in Nigeria. Therefore， MFIsfill their requirement apart from other largerfinancial institutions in the country.
Thirdly， the micro credit programs of non-governmental organizations （NGOs） and government establishments concentrated entirely on provision of credit. Saving was forgotten in the delivery offinancial services to the poor. Thus， microfinance banks have come to include the saving services to the masses.
Fourthly， donors， for instance， internationalfinancial corporation （IFC）， were considered as the only sources of loan funds， which unfortunately encouraged independence.
In view of the above reasons， the government had reconsidered the operational modality of microfinance to facilitate a very significant improvement infinancial service delivery and outreach.
7. STATEMENT OF RESEARCH PROBLEM
In October 2010， the researcher was puzzled with the withdrawal of licenses from 103 out of 407 listed Microfinance Banks in Nigeria by the CBN for non-performance. Meanwhile， thefirst goal/objective of CBN for Microfinance Banks in Nigeria is the establishment of microfinance banks to become imperative to provide diversified， affordable and dependablefinancial services to the active poor， in a timely and competitive manner that would enable them to undertake and develop long-term， sustainable entrepreneurial activities. If the non-performance is the reality of quite a good number of Microfinance Institutions in Nigeria， then， what is the destiny of the CBNsfirst goal for the Institution？ What is the hope and fate of the majority of Nigerians who are served by microfinance institutions？ These questions predicated the researchers drive for this study. （http//allafrica.com； [2，3]） 8. OBJECTIVES OF THE STUDY
The calculated chi-square statistic of 26.27 is greater than the critical value of 7.81. Therefore， the null hypothesis （H0） is rejected at the 5 percent level of significance. We then accept the alternative hypothesis （H1） that the yearly portfolio growth of SMFB Yola is not averagely 50.20%. Rather， Table 5 shows that， there is an appreciable portfolio growth of averagely 28.96%. This will be a lot of money when converted into Nairafigures.
Link Relative Portfolio Growth （2005-2009）
The bar and pie charts above diagrammatically display a clear picture of the portfolio by category of SMFB Yola. Group lending which is the formation of at least 8 to 10 members with a compulsory savings account with the bank， and have been running business of at least 6 months； tops the category chart with 51%. The least is the rent category with 0.1%. The rent category is loan given to borrowers who want to settle rent issues.
Note that， performing loans top the bar and pie charts above with over 70 million Naira. Loans in the loss category are less than 10 million Naira. We can then conclude that， SMFB Yola is not doing badly in the area of credit and loans. However， 9 million Naira cannot be termed small money for Microfinance Bank today. Therefore， the bank must sit up in pursuance of these out-standing loans to claim the money.
13. FOOD SECURITY AND EMPLOYMENT GENERATION Refer to Table 5 and Figure 2， 6% of the total portfolio allocation went to Agriculture coming a distance 4th to Group leading. This is grossly inadequate for a portfolio that is supposed to be theflagship of Food Security And Employment Generation given that Jemeta community and indeed Adamawa State with Population： 3，168，101 （2006 est.） in the North-Eastern Part of Nigeria is an Agrarian society with vast capable of being primarily engaged in farming and herding （cattle， goats， sheep）. Besides， what about thefishing opportunity along the her riverbanks. And This is a place where Peanuts （groundnuts）， cotton， sorghum， millet， rice， and corn（maize） are the main crops which can be exported， as are cattle， dyed skins， and gum arabic thereby improving the non-oil sector of the nation economy whose performance in the last one year has very encouraging. Since independence Agriculture has remain the largest employer of labour in Nigeria （before the discovery of crude oil） which has at today account nearly 42% of the nation G.D.P. Consequently， increasing the credit facility to Agricultural portfolio will have a multiplying effects in terms food security and job generation thereby going a long way to addressing the issues of absolute poverty and insecurity. Today， credits from Banks be it Commercial or Micro Finance to Agricultural portfolio have been abysmally hovering around 1-2% which confirm our result. For instance， a leading bank in the Nigeria precisely Access Bank Plc with all its spread committed less 2% of it funds to Agriculture this year in terms of credits to small， medium and large scale farmers with the claimed that the sector is largely not insured. No wonder， Agriculture which contributed 60-70% of the nation earnings in seventies today hardly account for 2-3% forty years after.
14. SUMMARY
Microfinance banks were established to help the poor and micro businesses by extendingfinancial services to them so that in the process， the poor and micro businesses will grow， generate income and bring about employment.
Between April 2008 and December 2009 C duration of less than 2 years； SMFB Yola gave out loans in the tune of over 315 million naira. This means that， there is huge demand by low income earners and micro businesses in Nigeria forfinancial services. As such， MFIs have a prominent role to play.
15. CONCLUSION
The analysis and computation of the performance of Standard Microfinance Bank（SMFB） Yola which is one of the MFBs in Nigeria shows a yearly portfolio growth of 28.96% （see Table 5） and chain relative portfolio growth of 548%， performing loans of 83.63%， pass and watch loans of 2.13%， substandard loans of 2.28%， doubtful loans of 1.65% and loss loans of 10.30% （see Table 4）. This tending-to-good-performance indicates that， some MFBs in Nigeria will actually help to achieve CBN’sfirst goal for MFBs. Thus， dispelling the researcher’s fears about the destiny of thefirst goal of CBN for MFBs and the fate of the majority of Nigerians who are served by microfinance institutions. Besides， the study shows that portfolio allocation to Agricultural sector in Nigeria is grossly inadequate hovering around 1-6% as such majority of farmers do not have access to reasonable fund to the extent that the cherished vision for food security and employment generation might become a pipe dream with concomitant national insecurity.
In the face of trying times for institutions such as Microfinance Banks which bear benefits to the masses， it is recommended that either or both the regulatory body or/and the institution should publish a hope-giving-information that will dispel the possibility of the public completely losing hope in such institutions.
Also， in order to avoid further occurrence of non-performance of MFBs in Nigeria， it is recommended that， MFBs should focus more on quality service and good governance than complain of inadequatefinance. This may help to avoid sharp practices and poor management that usually bring about bank’s failure. On the issue of food security and employment generation， the Federal Government through its organ of Central Bank should direct the MFBs and commercial banks to setup special Agricultural units cutting across the nation’s communities to increase famers access to credit and other extension services .
Government should reform the land use act of March 1978 through appropriate legislation to enable farmers use their land as asset collateral to access credit from banks. And also strengthen the Nigeria Agricultural Insurance Cooperation （NAIC） to provide insurance for farmers and their farms to encourage lending to Agricultural sectors.
REFERENCES
[1] BOFIA （1991）. Banks and otherfinancial institutions act （Section 61）. Retrieved from www.cenbank.org/out/publications/bsd/1991/bofia.PDF
[2] Central Bank of Nigeria （2005）. Microfinance policy， regulatory and supervisory framework for Nigeria. Retrieved from www.cenbank.org.PDF
[3] Central Bank of Nigeria （2010）. CBN approves revised banking model. Retrieved from www.cenbank.org/.../2010/pressrelease
[4] Olawepo， M. （2002）. Microfinance institutions in nigeria： policy， practice and potentials. In proceedings of the G24 Workshop on Constraints to Growth in Sub Saharan Africa， Pretoria， South Africa， November 29-30， 2002.
[5] Asian Development Bank （2000）. Finance for the poor： microfinance development strategy； beyond the green revolution. Retrieved from www.syngentafoun. dation.org/view/element href.cfm？src=1/779.PDF
[6] Robinson， M. （1995）. Introducing savings mobilization in microfinance programs： when and how？ Philippines： Microfinance Network Cavite.
[7] Otero， M.， & Rhyne， R. （1994）. Bringing back development in microfinance. Journal of Microfinance， 1（1）.
[8] Ledgewood， Y. （2000）. Micro credit initiatives for equitable and sustainable development： who pays？ World Development， 27（1）.
[9] Fruman， C. （1997）. Case studies in microfinance. Retrieved from http：// www.esd.worldbank.orglhtml/esd/agr/sbp/. http//allafrica.com
[10] Yaron， J. （1998）. What makes ruralfinancial institutions successful？ The World Bank Research Observer， 9（1）， 49-70.
Key words： Credit performance； Performing loan； Pass and watch； Substand； Doubtful； Loss； Portfolio growth； Link relative； Portfolio by category
1. INTRODUCTION
Robust economic growth cannot be achieved without putting in place well focused programs to reduce poverty through empowering the people by increasing their access to factors of production， especially credit. The dormant capacity of the poor for entrepreneurship would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant； increase employment opportunities， enhance household income， and create wealth. Microfinance is about providingfinancial services to the poor who are traditionally not served by the conventionalfinancial institutions.
According to [2]， three features distinguish microfinance from other formalfinancial products. These are： （i） the smallness of loans advanced and or savings collected， （ii） the absence of asset-based collateral， and （iii） simplicity of operations. In Nigeria， the formalfinancial system provides services to about 35% of the economically active population while the remaining 65% are excluded from access tofinancial services. These 65% are often served by the informalfinancial sector， through Non-Governmental Organization （NGO） - microfinance institutions， moneylenders， friends， relatives， and credit unions [4].
2. DEFINITIONS OF MICROFINANCE
According to [2]， Microfinance is the provision of a broad range offinancial services such as deposits， loans， payment services， money transfers， and insurance to poor and low income households and their micro enterprises. Microfinance services are provided from three types of sources； formal institutions， such as rural banks and corporative； semi-formal institutions such as non-governmental organizations； and informal sources such as money lenders and shopkeepers. Institutional microfinance is defined to include Microfinance services provided by both formal and semi-formal institutions. Microfinance institutions are defined as institutions whose major business is the provisions of microfinance services [5].
The concept of microfinance was examined from another perspective by Robinson [6]， who defined it as small scalefinancial service primarily credit and saving， provided to people who farmfish or herd， who operate small enterprises or micro enterprises where goods are produced， recycled， repaired or sold； who provide services； who work for wages or commissions， who gain income from renting out small amounts of land， vehicles， draft animals， or machinery and tools； and to other individuals and groups at the local levels of developing countries both rural and urban. This definition is encompassing as it fully indicates those who may benefit from microfinance institutions and also inform that developing countries need microfinance institutions than developed countries.
Otero and Rhyne [7] describe microfinance as a revolution that involves the large scale provision of small loans and deposit services to low income people by secure， conveniently located and competing commercialfinancial institutions thereby generating the process needed to democratize capital. This definition means that the members of microfinance institutions should be large enough to meet the needs of low income earners in the nation through the provision of deposit and loan facilities and to give room for health competition among them.
3. CONCEPTS AND TERMS RELATING TO MICROFINANCE INSTITUTIONS
Microcredit： Microcredit is a concept that has gained wide spread acceptance by international development agencies and major donors. It is viewed as a way to correct both governmental and market failure in sub Saharan Africa. Many view microcredit as a method for linking the formal and informal sector of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through microcredit is possible and desirable depending on macroeconomic reforms， respect for traditionalfinancing relationships and local control of institutions. However， very little has been done to determine the extent to which microcredit programs actually increase economic well being. Many of the loans， especially those made to women， are made using microcredit techniques， such as group lending [9]. Loans are targeted at the economically active poor - those not employed in the formal sector of the economy. 6. REASONS FOR DEVELOPMENT OF MICROFINANCE IN NIGERIA ECONOMY
According to Yaron [10]， the followings contribute to the reasons for establishing microfinance institutions in Nigeria：
Firstly， the concluded consolidation among conventional banks in Nigeria has systematically put to an end， more or less family banks. As a result 89 conventional banks in Nigeria were reduced to 26 by the end of December 31， 2006. With this， the CBN has opened another window C microfinance banks， with no restriction for the ownership of banks.
Secondly， Nigeria has remarkable entrepreneurs who need supports at every level and this includes micro， small and medium enterprises as well as big businesses. A common characteristic of these enterprises is their need for goodfinancing. Therefore， the provision of strong， competitive and well regulatedfinancial sectors， which will provide these categories of entrepreneurs with the much neededfinance apart from the conventional banking institution， has become very important in Nigeria. Therefore， MFIsfill their requirement apart from other largerfinancial institutions in the country.
Thirdly， the micro credit programs of non-governmental organizations （NGOs） and government establishments concentrated entirely on provision of credit. Saving was forgotten in the delivery offinancial services to the poor. Thus， microfinance banks have come to include the saving services to the masses.
Fourthly， donors， for instance， internationalfinancial corporation （IFC）， were considered as the only sources of loan funds， which unfortunately encouraged independence.
In view of the above reasons， the government had reconsidered the operational modality of microfinance to facilitate a very significant improvement infinancial service delivery and outreach.
7. STATEMENT OF RESEARCH PROBLEM
In October 2010， the researcher was puzzled with the withdrawal of licenses from 103 out of 407 listed Microfinance Banks in Nigeria by the CBN for non-performance. Meanwhile， thefirst goal/objective of CBN for Microfinance Banks in Nigeria is the establishment of microfinance banks to become imperative to provide diversified， affordable and dependablefinancial services to the active poor， in a timely and competitive manner that would enable them to undertake and develop long-term， sustainable entrepreneurial activities. If the non-performance is the reality of quite a good number of Microfinance Institutions in Nigeria， then， what is the destiny of the CBNsfirst goal for the Institution？ What is the hope and fate of the majority of Nigerians who are served by microfinance institutions？ These questions predicated the researchers drive for this study. （http//allafrica.com； [2，3]） 8. OBJECTIVES OF THE STUDY
The calculated chi-square statistic of 26.27 is greater than the critical value of 7.81. Therefore， the null hypothesis （H0） is rejected at the 5 percent level of significance. We then accept the alternative hypothesis （H1） that the yearly portfolio growth of SMFB Yola is not averagely 50.20%. Rather， Table 5 shows that， there is an appreciable portfolio growth of averagely 28.96%. This will be a lot of money when converted into Nairafigures.
Link Relative Portfolio Growth （2005-2009）
The bar and pie charts above diagrammatically display a clear picture of the portfolio by category of SMFB Yola. Group lending which is the formation of at least 8 to 10 members with a compulsory savings account with the bank， and have been running business of at least 6 months； tops the category chart with 51%. The least is the rent category with 0.1%. The rent category is loan given to borrowers who want to settle rent issues.
Note that， performing loans top the bar and pie charts above with over 70 million Naira. Loans in the loss category are less than 10 million Naira. We can then conclude that， SMFB Yola is not doing badly in the area of credit and loans. However， 9 million Naira cannot be termed small money for Microfinance Bank today. Therefore， the bank must sit up in pursuance of these out-standing loans to claim the money.
13. FOOD SECURITY AND EMPLOYMENT GENERATION Refer to Table 5 and Figure 2， 6% of the total portfolio allocation went to Agriculture coming a distance 4th to Group leading. This is grossly inadequate for a portfolio that is supposed to be theflagship of Food Security And Employment Generation given that Jemeta community and indeed Adamawa State with Population： 3，168，101 （2006 est.） in the North-Eastern Part of Nigeria is an Agrarian society with vast capable of being primarily engaged in farming and herding （cattle， goats， sheep）. Besides， what about thefishing opportunity along the her riverbanks. And This is a place where Peanuts （groundnuts）， cotton， sorghum， millet， rice， and corn（maize） are the main crops which can be exported， as are cattle， dyed skins， and gum arabic thereby improving the non-oil sector of the nation economy whose performance in the last one year has very encouraging. Since independence Agriculture has remain the largest employer of labour in Nigeria （before the discovery of crude oil） which has at today account nearly 42% of the nation G.D.P. Consequently， increasing the credit facility to Agricultural portfolio will have a multiplying effects in terms food security and job generation thereby going a long way to addressing the issues of absolute poverty and insecurity. Today， credits from Banks be it Commercial or Micro Finance to Agricultural portfolio have been abysmally hovering around 1-2% which confirm our result. For instance， a leading bank in the Nigeria precisely Access Bank Plc with all its spread committed less 2% of it funds to Agriculture this year in terms of credits to small， medium and large scale farmers with the claimed that the sector is largely not insured. No wonder， Agriculture which contributed 60-70% of the nation earnings in seventies today hardly account for 2-3% forty years after.
14. SUMMARY
Microfinance banks were established to help the poor and micro businesses by extendingfinancial services to them so that in the process， the poor and micro businesses will grow， generate income and bring about employment.
Between April 2008 and December 2009 C duration of less than 2 years； SMFB Yola gave out loans in the tune of over 315 million naira. This means that， there is huge demand by low income earners and micro businesses in Nigeria forfinancial services. As such， MFIs have a prominent role to play.
15. CONCLUSION
The analysis and computation of the performance of Standard Microfinance Bank（SMFB） Yola which is one of the MFBs in Nigeria shows a yearly portfolio growth of 28.96% （see Table 5） and chain relative portfolio growth of 548%， performing loans of 83.63%， pass and watch loans of 2.13%， substandard loans of 2.28%， doubtful loans of 1.65% and loss loans of 10.30% （see Table 4）. This tending-to-good-performance indicates that， some MFBs in Nigeria will actually help to achieve CBN’sfirst goal for MFBs. Thus， dispelling the researcher’s fears about the destiny of thefirst goal of CBN for MFBs and the fate of the majority of Nigerians who are served by microfinance institutions. Besides， the study shows that portfolio allocation to Agricultural sector in Nigeria is grossly inadequate hovering around 1-6% as such majority of farmers do not have access to reasonable fund to the extent that the cherished vision for food security and employment generation might become a pipe dream with concomitant national insecurity.
In the face of trying times for institutions such as Microfinance Banks which bear benefits to the masses， it is recommended that either or both the regulatory body or/and the institution should publish a hope-giving-information that will dispel the possibility of the public completely losing hope in such institutions.
Also， in order to avoid further occurrence of non-performance of MFBs in Nigeria， it is recommended that， MFBs should focus more on quality service and good governance than complain of inadequatefinance. This may help to avoid sharp practices and poor management that usually bring about bank’s failure. On the issue of food security and employment generation， the Federal Government through its organ of Central Bank should direct the MFBs and commercial banks to setup special Agricultural units cutting across the nation’s communities to increase famers access to credit and other extension services .
Government should reform the land use act of March 1978 through appropriate legislation to enable farmers use their land as asset collateral to access credit from banks. And also strengthen the Nigeria Agricultural Insurance Cooperation （NAIC） to provide insurance for farmers and their farms to encourage lending to Agricultural sectors.
REFERENCES
[1] BOFIA （1991）. Banks and otherfinancial institutions act （Section 61）. Retrieved from www.cenbank.org/out/publications/bsd/1991/bofia.PDF
[2] Central Bank of Nigeria （2005）. Microfinance policy， regulatory and supervisory framework for Nigeria. Retrieved from www.cenbank.org.PDF
[3] Central Bank of Nigeria （2010）. CBN approves revised banking model. Retrieved from www.cenbank.org/.../2010/pressrelease
[4] Olawepo， M. （2002）. Microfinance institutions in nigeria： policy， practice and potentials. In proceedings of the G24 Workshop on Constraints to Growth in Sub Saharan Africa， Pretoria， South Africa， November 29-30， 2002.
[5] Asian Development Bank （2000）. Finance for the poor： microfinance development strategy； beyond the green revolution. Retrieved from www.syngentafoun. dation.org/view/element href.cfm？src=1/779.PDF
[6] Robinson， M. （1995）. Introducing savings mobilization in microfinance programs： when and how？ Philippines： Microfinance Network Cavite.
[7] Otero， M.， & Rhyne， R. （1994）. Bringing back development in microfinance. Journal of Microfinance， 1（1）.
[8] Ledgewood， Y. （2000）. Micro credit initiatives for equitable and sustainable development： who pays？ World Development， 27（1）.
[9] Fruman， C. （1997）. Case studies in microfinance. Retrieved from http：// www.esd.worldbank.orglhtml/esd/agr/sbp/. http//allafrica.com
[10] Yaron， J. （1998）. What makes ruralfinancial institutions successful？ The World Bank Research Observer， 9（1）， 49-70.