Evaluation of Artisanal and Small-Scale Mining Operators' Access to Finance in Nasarawa State

The artisanal and small-scale mining (ASM) sector constitutes a crucial element within resource-based economies, making substantial contributions to both employment and mineral production. This research assesses the accessibility of finance for ASM operators in Nasarawa State. The primary aim was to identify the challenges impeding artisanal and small-scale mining's financial access and to propose strategies for overcoming these hindrances. Primary data was gathered through structured surveys administered to ASM operators and executives from deposit money banks (DMBs). Additionally, qualitative insights were obtained from in-depth interviews involving key stakeholders: miners, government officials, financial institutions, and community representatives. A total of 402 participants took part, comprising 380 artisanal miners and 22 DMB executives, resulting in an average of 4 participants per Local Government Area (LGA). The findings reveal an array of obstacles obstructing ASM operators from obtaining financial support. Access to finance emerges as a pivotal determinant for the success of artisanal and small-scale mining in Nasarawa state. Nevertheless, due to their informal operations and associated risks, commercial banks exhibit reluctance in extending credit to them. The factors limiting ASM's financial access in the State, as identified in this study, encompass insufficient collateral that meets financial institutions' criteria, limited capacity for business planning and record-keeping, as well as an absence of corporate governance structures necessary for effective loan assessment and documentation. Furthermore, numerous ASM operators in Nasarawa state possess limited knowledge and skills in business management, rendering them incapable of generating necessary documents like feasibility studies, required by potential lenders. Ultimately, ASM undeniably constitutes a critical sector that sustains the livelihoods of many individuals. However, its contribution to the state's economy remains below par, primarily due to the operators' lack of financial access. Addressing these constraints necessitates collaborative efforts from all stakeholders in Nasarawa state's mining value chain. This entails the formulation and execution of strategic policies and initiatives to promote formalization of artisanal mining operations, alongside providing training and workshops on financial management, bookkeeping, and loan terms for miners. The establishment of a risk-sharing mechanism based on incentives could also mitigate the risks associated with ASM activities. Such an approach would enable cooperative risk and reward sharing among the state government, financial institutions, and artisanal miners, fostering cooperation, responsible conduct, and resilience when facing uncertainties.