Empirical Evaluation of Contemporary Performance Measurement Practice among Nigerian Microfinance Banks
Banking is the core of the financial system which has important role in attracting deposit to provide credits to borrowers, services to customers and booting the economy development. Microfinance policy is designed to achieve the foregoing important role for low income earners and the rural dwellers. Achieving this task, microfinance banks is expected to design and implement an appropriate performance measurement systems that beyond traditional financial measures to monitor activities. This paper investigates the extent of Contemporary Performance Measures (CPM) usage in microfinance banks, identify the existing performance measures, problems encounter in implementing the measures and test if there is significant difference on the extent of usage of CPM between microfinance banks located in big and medium cities specifically Ibadan and Ilorin metropolis. Surveyed data collected from randomly selected forty (40) microfinance bans was analyzed through descriptive statistic techniques (percentage, mean scores) and independent sample T-test. The results suggest usage of CPM is low in about CPM majorly account for low usage. This trend cut across cities as there was no significant difference between Ibadan and Ilorin on the extent of usage of CPM. Small and Medium Business Organization in financial service sector should consistently review the performance measurement framework in line with global best practices and relevant regulatory agencies in the financial service sector should evolve strategies to assist microfinance bank in the areas of performance management.
