Demographics Differences in the Microfinance Clients' Perception Towards Islamic Microfinance: The Case Of Nigeria

Islamic microfinance plays a significant role in catering for less or underprivileged society such as small business owners, low-income earners, and the low individuals excluded by the former commercial or microfinance institutions due to their unstable and promised financial stand. This paper investigates the differences in the perception of microfinance clients' demographic characteristics towards Islamic microfinance. The convenience sampling technique was adopted to select the study sample in collecting data from the beneficiaries of the microfinance clients in Kwara state.  A total of 400 data were obtained and analyzed on SPSS Version, 25 using descriptive analysis, independent sample t-test, and one-way ANOVA. The findings indicate a statistically significant difference in the microfinance beneficiaries' perception in terms of their demographic region, age, marital status, religion, and education level. In contrast, no significant difference was found in terms of their gender and occupation. This study's findings provide empirical implications for the policymakers and microfinance institutions in segmenting and actualizing the microfinance beneficiaries' relative financial needs concerning their demographic characteristics.

Islamic microfinance plays a significant role in catering for less or underprivileged society such as small business owners, low-income earners, and the low individuals excluded by the former commercial or microfinance institutions due to their unstable and promised financial stand. This paper investigates the differences in the perception of microfinance clients' demographic characteristics towards Islamic microfinance. The convenience sampling technique was adopted to select the study sample in collecting data from the beneficiaries of the microfinance clients in Kwara state. A total of 400 data were obtained and analyzed on SPSS Version, 25 using descriptive analysis, independent sample t-test, and oneway ANOVA. The findings indicate a statistically significant difference in the microfinance beneficiaries' perception in terms of their demographic region, age, marital status, religion, and education level. In contrast, no significant difference was found in terms of their gender and occupation. This study's findings provide empirical implications for the policymakers and microfinance institutions in segmenting and actualizing the microfinance beneficiaries' relative financial needs concerning their demographic characteristics.

Introduction
Socio-economic development is a universal prerequisite for every nation's prospect in ensuring the achievement of sustainable socio-economic wellbeing through education, employment, stable income, and better healthcare. However, over the years, this objective has not been significantly achieved by many countries despite the placement and initiation of rigorous measures by national and global bodies as the incidence of poverty seems to be an epidemic and societal disease across the world, relatively in the developed, developing and less developing countries (Maikabara A.A & Zakariyah H., 2020)

most especially in Sub Saharan
Africa. Notably, according to a world bank report, in 2017, the global poverty rate amounted to 9.2 percent, which constitutes that 689 million people lived on less than $ 1.90 a day, while 24.1 percent of the world lived on less than $3.20 and relatively 43.6 percent on less than $5.50 a day. Meanwhile, in 2018, four out of five people living below the global poverty line lived in rural areas as half of the poor are children, and in most regions, women were the majority.
Approximately 70 percent of the poor in the world aged between 15 and above, having primary or no education, and about 132 million poor live in flood risk areas. In Sub-Saharan Africa, half of the poor people live in Nigeria, Tanzania, Ethiopia, Madagascar, and the Democratic Republic of Congo. Even though the global agenda to tackle extreme poverty, the poverty rate is forecasted to increase. Worse after a significant decline due to the Covid-19 pandemic outbreak upon the incidence of conflicts and climate change as the negative effect of  would pose about 88 million to 115 million people into extreme poverty, adding to the current figure and will totally account for 703 and 729 million. Tre will be 82 percent of new poor in middle-income countries such as Nigeria and India (The World Bank, 2020).
In the context of Nigeria, the country has been bestowed with tremendous natural resources with a high population which more than 200 million and is one of the emerging African countries contributing to not only Africa economy but also the global economic growth as it is ranked as the 27 th largest economy in the world in term of nominal GDP (The world Bank, 2020). Despite all these, Nigeria is still considered as one of the African countries being vulnerable to poverty. According to the report of the 2019 poverty and inequality in Nigeria by the National Bureau of Statistics, 40 percent of Nigerians, which is about 83 million, live below the country's poverty line of 137, 430 Naira equivalents to $381.75 per year (The world Bank, 2020). The unemployment rate is 27.1 percent as of the second quarter of 2020, meaning that 21.7 million Nigerians are unemployed (Nairametrics, 2020). In the financial sector, only 35 percent of the population is served by traditional commercial banks while the other 65% of the population is excluded as the poor and low-income population having no or small business and small scale farming are unprivileged to meet their basic and business financial needs (Maikabara, 2020).
In light of this, the Nigerian government promoted the microfinance system to exhibit poverty eradication and financial inclusion. The microfinance system takes the responsibility of providing financial services wide-reaching, particularly in evolving markets, to the people with inadequate access to the mainstream financial market and sad to be un-bankable or the people who are at risk of financial segregation (Aladejebi, 2019). Typically, Ledgerwood & White (2006) describe microfinance as an effort to increase access to small credits and small savings for poor houses, which has been neglected by mainstream financial institutions.
However, microfinance has been said to be an essential mechanism that has been successfully used by many developing countries in cropping poverty and reducing unemployment among poor and underprivileged people (Rahman & Mazlan, 2014). In 2011 the Central Bank of Nigeria (CBN) enacted regulatory and supervisory guidelines for Microfinance Banks in Nigeria, which was amended in 2012. In March 2020, this guideline was again amended and replaced by the guidelines for regulation and supervision of Microfinance Banks in Nigeria (S.P.A. Ajibade & Co. Resources, 2020;CBN, 2020). Since 2011, many Microfinance Banks have been registered across Nigeria and provide financial services to underprivileged people in all 774 local governments of Nigeria (Okpara, 2010). As of December 2019, the CBN has licensed a total number of 913 Microfinance Banks to serve the societal and economic development and financially support small and medium businesses (CBN, 2019).
Despite having many microfinance banks, the percentage of the poor people and small businesses that are financially supported is still small as many studies revealed that poor lowincome groups and small business owners are not significantly financed by the microfinance banks (Muhammad T & Mamman D., 2017;Maikabara, 2020 (Maikabara, 2020).
In this essence, Islamic microfinance is an ethical financial institution that focuses on unprivileged or less privileged unbanked poor individuals, low-income earners, small businesses excluded by formal commercial banks microfinance banks due to their lack of creditworthiness. All the groups are financially included in the Islamic microfinance schemes and served based on their demographic characteristics ranging from gender, age, marital status, region area, religion, occupation, and monthly income. It is worth mentioning that Islamic finance, in general, accommodates all segments of society irrespective of their religious affiliation and ethnicity. Notably, many studies conducted on some geographical zones in However, despite that many rigorous studies have been conducted investigating the role of Islamic microfinance on socio-economic development, only a few studies have mainly assessed the demographic differences in the perception of microfinance beneficiaries towards Islamic microfinance, one of which is the study of Maikabara (2020) that investigated in the differences in the beneficiaries' perception towards Islamic microfinance in terms of the gender, occupation, and religion. This study aims to fill this research gap by examining the differences in microfinance beneficiaries' perceptions of Islamic microfinance based on their demographic characteristics. The research is organized as follows. Section 2 presents a literature review on the concept of microfinance and its historical background. Section 3 addresses the research method used in achieving the research objective as it highlights the instrument of data collection, data analysis approach, and presentation of the respondents' profile. Section 4 represents the research results and analytical discussion. Lastly, section 5 concludes the research.

Concept of Microfinance and its Practices
Over the decades, the concept of microfinance has experienced an in-depth operational conceptualization due to its organic manner as a financial norm embedded with a sophisticated ecosystem having comprised of inter-dimensional financial paradigms and schemes. According to Otero (1999), Microfinance is an institution that aims at providing financial services for low-income citizens and self-employed people who have no access to financial services. Interestingly, these financial services include credit and saving, other forms of financial services, payment services, and insurance. Microfinance is a financial improvement method that encompasses offering financial services, to low-income customers, via institutions where the market fails to offer proper services (Michael, 2008). Typically, Ledgerwood & White (2006) describe microfinance as an effort to increase access to small credits and small savings for poor houses, which has been neglected by mainstream financial institutions. However, microfinance has been said to be an essential mechanism that has been successfully used by many developing countries in cropping poverty and reducing unemployment among poor and underprivileged people (Rahman & Mazlan, 2014). It has also been noted that microfinance services have added to accomplishing several Millennium Development Goals' objectives (MDGs), comprising poverty mitigation via income generation (Basu, Roy, & Karmokar, 2020). Thus, the core objective of the microfinance segment is to empower the underprivileged fellows of society financially and nurture Sustainable Development (Nor, 2019).
More comprehensively, The microfinance system takes the responsibility of providing financial services wide-reaching, particularly in evolving markets, to the people with inadequate access to the mainstream financial market and sad to be un-bankable or the people who are at risk of financial segregation (Aladejebi, 2019). The segment is categorized by concentrating mostly on low-money services and products, easy access to financial mechanisms, simple primary procedures, and structured return assurances (Saeed, 2019).
Micro-savings provide microfinance that makes underprivileged people preserve money and other valuables substances and earn interest (A. A. Babajide, 2016). It allows a bunch sum to be enjoyed upcoming interchange for a sequence of savings made now (Michael Ayertey, 2008). On the other hand, microcredit provides small loans to self-employed people who are underprivileged and poor enough to qualify for mainstream financial institution loans because they cannot provide physical collateral. (Al-Shami, Majid, Mohamad, & Rashid, 2017).
Specifically, in developing countries, micro-credit allows underprivileged people to participate in self-employment ventures and businesses that make earnings, therefore allowing these people to build their level of material living and their families by themselves (Michael, 2008).
Contrarily, Islamic microfinance is an Islamic form of microfinance that provides financial services to underprivileged poor and low-income earners who are un-bankable because they are completely or fractionally excepted in the conventional microfinance system from exercising financial services due to their low economic position (Maikabara, 2020). However, there are several differences that distinguish Islamic microfinance from its conventional counterpart in both operation and scheme, such as religious element, sources of fund, instruments, and ethical norms (Maikabara, Aderemi, & Maulida, 2020). Islamic microfinance added to being a financial institution that maneuver two missions of being social and financial intermediation, Islamic microfinance is similarly a missionary organization that conveys a spiritual duty (Wediawati, Effendi, Herwany & Masyita, 2018). Additionally, this duty is as well revealed in the spiritual intermediary movement to educate the people and spread the practices and ethics of Shari'ah, hence that they are expansively understood and practiced by all participants (Wulandari, Kassim, Sulung & Putri, 2016).

Historical Background of Microfinance in Nigeria
Historically, the modern microfinance idea can be traced back to the 1970s when the Grameen Bank in Bangladesh, founded by the renowned pioneer Muhammad Yunus, was established (Maikabara et al. to help poor women (Michael, 2008). Remarkably, for the success of the Grameen microcredit scheme, the 1980s onwards, several governmental and non-governmental groups from corner to corner of the globe work concerning the reproduction of the initiative because of its remarkable impact on the welfare of society (Nor, 2019), Microfinance institution such as FINCA (Foundation for International Community Assistance) and ACCION (Americans for Community Cooperation in Other Nations) grasped to hold the market and extended through Latin America (Saeed, 2019). Subsequently, succeeding in these initial organizations' success, other microfinance institutions started to take off across the emerging world (Rahman & Mazlan, 2014) include Africa (Mutalima, 2015).
Successively, in Nigeria, the practice of microfinance has been in existence for more than five decades. However, the initial years' operation was in the form of an unofficial organization (Alaro & Alalubosa, 2019). As noted by Babajide, (2011) Microfinance has been practiced in Nigeria as far as before the Central Bank of Nigeria began the announce of microfinance banking, according to him some organization has been offering credit to the rural-urban poor and low-income earners, an organization such traditional ROSCAs (Rotating Savings and Credit Association) or formal SHGs (Self-help groups). And their other forms are referred to with different names based on various Nigerian languages; Hausa calls it Adashi while Yoruba and Igbo refer to it as Ajoor Esusu and Uto or Isuzu that respective (Maruf, 2013).
Subsequently, After some years, taking the first step into formalizing the previous informal application of microfinance services, CBS (Community Banks) was established. Still, due to numerous inadequacy and regulatory frameworks, it wasn't live long enough before it was closed down (Alaro & Alalubosa, 2019). Instead of that, the first microfinance banks (MFBs) were introduced in several parts of the country to serve the poor and low-income people (Jenyo & Adebayo, 2014). To enhance financial services to flow to MSMEs (Micro, Small, and medium enterprises) across the country in December 2005, Nigeria's Federal government laid down some regulatory framework. It established new policies for microfinance (Abiola, 2011). In 2012, the Central Bank of Nigeria also enacted regulatory and supervisory guidelines for microfinance banks in Nigeria, which has just been revised and

Research Method
This study examines the differences in the selected demographic characteristics of the study sample, which are the beneficiaries of the conventional microfinance banks in Kwara state. In light of this, both primary and secondary data were used as the former attributes an empirical data collection from the beneficiaries. However, the latter reviewed the previous literature on the concept of microfinance solely, and its operational background in Nigeria as research articles, books, and related materials was reviewed.

Instrument of Data collection and procedure
The study used a questionnaire survey as a convenience sampling technique was adopted in collecting empirical data from the beneficiaries of the conventional microfinance banks in Kwara State of Nigeria, which is statistically considered to be one of the northern-Nigerian geographical areas having more than 60% poverty rate compared to the southern part of the country. The justification for adopting the convenience sampling was due to the infinity and unknown population of the beneficiaries across the state and the convenience of getting reliable and sufficient data through the sampling technique as presumed by many researchers.
For this, the researchers randomly selected 400 samples. The data collected from 450 questionnaires were distributed to microfinance beneficiaries in the state. This method was used to ensure the generate of an accurate sample size of the study.

Data Analysis
Descriptive analysis of frequency and percentage was used to report the respondents' statistical findings of the respondents' demographic characteristics. Meanwhile, the independent sample t-test and one way ANOVA were used to inform the demographic variables' statistical differences. The data analysis was used to achieve the objective aims of the study

Research Hypothesis
As this study sought to investigate the demographic differences in the perception of microfinance beneficiaries towards Islamic microfinance, the following hypotheses were predicted: H01: There is no significant difference between the gender of microfinance beneficiaries and their perception towards Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' age and their perception of Islamic microfinance. H 0 1: There is no significant difference between microfinance beneficiaries' marital status and their perception of Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' religion and their perception towards Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' religion and their perception towards Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' region and their perception towards Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' education level and their perception of Islamic microfinance. H01: There is no significant difference between microfinance beneficiaries' occupation and their perception towards Islamic microfinance. H01: There is no significant difference between the monthly household income of microfinance beneficiaries and their perception towards Islamic microfinance. follow by the businessman and businesswoman respondents (138.34.5%) as those who both civil servant and business are tiny (24/6.0%). Lastly, most of the respondents have a monthly household income ranging from ₦30,000 and above (182/45.5%). In comparison, the least are respondents whose income falls relatively between ₦5,000-9,999 (31/7.8%), which is slightly different from the respondents having less than ₦5,000 as their monthly income (37/9.3%).

Result and Discussions
The study aims to examine a statistical difference in the perception of microfinance banks' beneficiaries towards Islamic microfinance and its operation to articulate and segment their financial needs and how critically and the potential they can be supported through Islamic microfinance schemes based on their demographic characteristics. In light of this, an independent sample t-test was used in analyzing the demographic differences in terms of their gender and region area where their patronized microfinance bank is situated. One-way ANOVA was also adopted as an approach for analyzing the differences in terms of the beneficiaries' age, marital status, religion, education level, occupation, and monthly household income.  and a 95% confidence interval. Based on this, the null hypothesis was not rejected, so it can be concluded that there is no significant difference in the mean of the rural and urban regions, so there is no difference in the perception of microfinance beneficiaries towards Islamic microfinance. This study shows the necessity of promoting Islamic microfinance outreach in rural areas as the agrarian beneficiaries of microfinance bank services seem to have a very significant different perception of Islamic microfinance than urban segments that dominate not only formal commercial institutions but also the social and micro-financing institutions. This finding is following Maikabara (2020) study, which indicated a regional financial gap.
Meanwhile, there is a crucial need for financial support in the rural region where many remote villages are situated, and poverty is highly vulnerable as many poor individuals are in desperate need of basic financial amenities as well as those who are farmers with outstanding agricultural skills are hopeless due to absence or insufficient financial stand for sustaining their operation. More so, most of them find it difficult to financially support their children's education, which constitutes illiteracy and ignorance as the children can either fall within no formal education or dropout status. In contrast, in the past decades, rural areas had remarkably contributed to economic development and social wellbeing through agriculture. The policymakers are encouraged to employ collective measures in surveying the efficient operation of Islamic microfinance in the rural regions across the country, such as human capital empowerment and financial management skills to promote rural businesses and microagricultural financing using the Islamic microfinance instruments based on the beneficiaries' demographic, financial preference and productivity of their business projects and agricultural financial choices. Above Table 5, the findings of the variance showed that the beneficiaries' age constitutes a significant difference in their perception towards Islamic microfinance as F (4,393) = 13.662, p= .000, which is <0.05. Based on this, the null hypothesis was rejected, and the alternative hypothesis was supposed. It can be concluded that there is a big significant difference in the perception of microfinance beneficiaries towards Islamic microfinance in terms of their age. It can be interpreted that many of the respondents falling under the age groups older than the young people whose ages range from 18 to 30 have zero or little knowledge about Islamic microfinance concepts and operations. This dictates the significant difference in their perception compared to those who have proper knowledge about its operations; this might be due to their basic understanding of Islamic teachings embedded in the Islamic microfinance ecosystem. In addition, the financial privilege also constitutes the perception difference as the young people who dominated the patronage of microfinance banks have strong exposure and access to the products and operations of the banks as the promising creditworthy segment of the society with Hence, this revealed the issue of financial exclusion in microfinance system as proven in many studies. In light of this, Islamic microfinance has a financial inclusion tool have a significant role to play in supporting all segments of society be it creditworthy young group, poor or unbanked low income older people, all the age groups are financially included whereby they can be supported through the inter-dimensional instruments of Islamic microfinance ecosystem such as waqf, zakat, micro-takaful, wakalah, mudarabah and musharakah, all are structured based on their social, financial segment and ensure that they are financially independent and at the same time be productive assets to achieving sustainable socio-economic development. as some of them have the privilege to be served by the microfinance banks, and they have been exposed to the financial schemes compared to those who are less privileged even though they might have basic Islamic values governing Islamic microfinance system. Meanwhile, Islamic microfinance has the potential to serve all the marital groups in accordance with their financial needs, which is why it is imperative to orient all the groups about the financing schemes for Islamic microfinance to facilitate their financial preferences. The findings indicated a significant difference between respondents' religion and their perception towards Islamic microfinance as the statistical analysis shown that F (2,397) =6.298, p-value =.002, which is <.005. The null hypothesis that there is no statistically  institutions across the country to serve the social needs most especially the financial outreach of small businesses, which are considered as one of the significant segments consolidating the growth of economic development apart from business success. It can also improve their occupation opportunities and createne for the underprivileged groups through its various instruments (Muhammad T & Mamman D., 2017;Maikabara, 2020). to serve underprivileged small business and poor and low-income individuals seem to profoundly suit the financial needs of customers with credible and promising financial status as addressed in many studies, there was no difference between the perception of the beneficiaries dominating the survey and the less privileged towards Islamic microfinance. In this essence, Islamic microfinance as a tool for ensuring financial inclusion and equity has a great role in facilitating all segments of society's financial needs by developing a suitable financial scheme for each segment based on its flexibility and sophistication from not-forprofit and for-profit instruments. There might be another discussion on some practical loopholes in some Islamic microfinance institutions operating just like their conventional counterparts. Hence, effective sharia governance and adequate regulatory framework is needed to enable Islamic microfinance to exhibit its mandate as proven to be viable in many studies which show its impact on improving not under asset possession and education but also improvement of income level and uplifting economic status (Rokman, 2013;Asmawat A. & Ahmad S., 2015; ZaidMahmood H., Abbas K & Fatima M., 2017)

Conclusion
The study examined the significant difference between the beneficiaries of microfinance banks' demographic characteristics and their perception towards Islamic microfinance. The findings revealed a statistically significant difference between the beneficiaries' perception of Islamic microfinance and their demographic age, marital status, religion, and education level.
Meanwhile, no significant difference was found in their gender, region and occupation, and monthly household income. The findings revealed the level of financial inclusion in the microfinance banks and the beneficiaries' perception of Islamic microfinance. This study constitutes a great implication on Islamic microfinance's potential role in serving the financial needs of underprivileged poor, unbanked individuals, low-income earners, and small businesses. Hence, the policymakers should employ proactive measures to raise the awareness of Islamic microfinance institutions and strengthen its wider operation across the country.
They should also ensure the implementation of proper and adequate governance for the institution to exhibit its mandate.