This study aims to address challenges posed to Microfinance institution (MFIs) as they work to improve
access to credits by poor entrepreneurs among farmers and other low resource-based individuals. This
prompted this research work. A field survey, using multiphase sampling technique, was conducted to
select samples for detailed analysis. Two sets of questionnaires were administered on the eleven (11)
MFI decision units in Kano State, to collect information on their characteristics, financial resources and
mode of operations; sources and uses of funds, resource use efficiency as well as outreach. Levels of
savings of members, microloans packaged and delivered, women participation, levels of profits
generated as well as returns to investments and to assets were measured. The results showed that
three categories of MFIs operate in the area namely: formal finance institutions (FFIs), semi-formal
finance institutions (SMFIs), and informal finance institutions (IMFI) each with its unique features and
mode of operations. They share many common problems from low level of member savings, low equity
levels lower than the African average in all cases and high level of borrowed funds. Though the returns
indicated that average returns on assets for IMFI and SMFI ranged from 4 to 6% over the period, higher
than the African average of 2% and confirms efficient use of resources, high dependence on costly
borrowed funds as against savings by members may delay achievement of sustainability going by their
level of dependence on subsidy. As to the main activities engaged by MFIs, petty trading ranks first
followed by farming, equipment financing, livestock rearing, food and restaurant services, artisans and
household wares trading respectively. With regards to problems and constraints to their growth they
ranked lack of qualified staff, inadequate working capital, board decision problems, fund recovery,
government policy changes, and sourcing additional funds in the fore front. Suggested solutions were
made. Overall, it is evident that MFIs in Kano are profitable, efficient and could be sustainable if the
identified problems and constraints are addressed by stakeholders and suggested solutions are
adhered to.