An Evaluation of Investment in Human Capital Development on the Performance of Microfinance Banks (MFB) in Nigeria

In view of collapse of the Nigeria educational system, weak leadership and negative cultural values and mass illiteracy levels; more specifically inadequate skilled human capital within the financial services industry and poor infrastructure, this study aims at evaluating investment in human capital development costs (wages, training cost and other costs) on the performance of microfinance banks in Nigeria. Investment by firms in human resources by acquisition and training will lead to anticipating a future generation of profits and services that will be produced by these assets. The study adopted a purposive sample and Sixteen (16) Micro finance banks out of the thirty four (34) existing in Ogun state was investigated. Random sampling technique was used to select respondents in each Micro Finance Banks cutting across directors, employees and shareholders of the Micro Finance Banks. A total of 320 collected questionnaires were used for data analysis. The data were analyzed using appropriate (parametric and non-parametric techniques) descriptive and inferential statistical techniques. A total of 313 of the sample representing (98.4% of the sample) agreed that the efficiency and effectiveness of management is a major determinant of the performance of Micro Finance Banks. in Nigeria. The study also finds that human capital development has positive impact on overall performance of Microfinance banks. The study recommends that training and retraining of employees should be given top priority for the sustainability micro finance banks in Nigeria.