ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) DISCLOSURE AND INSTITUTIONAL SUSTAINABILITY AMONG MICROFINANCE BANKS IN SOUTH-SOUTH NIGERIA

Abstract

For Microfinance Banks (MFBs) in South-South Nigeria, reporting on environmental, social and governance issues has become more pressing as donors and regulators push for sustainable finance. Yet the Niger Delta is a difficult place to run a small bank, given oil spills, seasonal floods, and borrowers whose incomes can vanish overnight. This empirical article examines whether ESG disclosure helps MFBs sustain their operations. Data were obtained from 200 usable survey responses collected from senior staff of licensed MFBs across Akwa Ibom, Bayelsa, Cross River, Delta, Edo, and Rivers States. A five-point scale questionnaire was used, and Cronbach's alphas ranged from 0.68 to 0.85. Multiple regression analysis (SPSS v27) produced mixed results: social disclosure showed a positive effect (β = 0.44, p < 0.01); environmental disclosure was not statistically significant once other factors were included (β = 0.15, p = 0.135); and governance disclosure showed a positive but modest effect (β = 0.27, p < 0.05). The article concludes that social reporting matters most to these MFBs, while environmental and governance disclosure face real-world obstacles. The Central Bank of Nigeria should reconsider before imposing a complex ESG template on small banks that are still trying to survive.