This research work was designed specifically to examine the impact of micro finance bank on rural development in Nigeria with special reference to Amoye Micro Finance Bank, Ikere – Ekiti. Questionnaire was used to collect the required data. Data collected was analyzed using descriptive statistics, table, percentages and average. The study revealed that Amoye Micro Finance Bank has reduced unemployment in Ikere community as well as promoting trade and commerce. Recommendation was made on how to enhance the operation of Amoye Micro Finance Bank, Ikere- Ekiti for effective performance.
1.1 Background of the study
There is an wide acceptance of the assumption that financial institution in particular micro finance banks are major engines of economics growth and developments that the rural areas in Ekiti- state have been starved of any appreciable development can never be over emphasized.
A critical study of some rural areas in Nigeria in relation to Ekiti- state as a whole and the Ikere land in particular will convince us that there is no serious development in the rural areas especially in the aspect of banking. This explains why there is high rate urban drift in all part the country. This has cause a lot of unisonant hardship at both the labour force leave the rural areas, and allow their aged parents alone to remain which creates room for poverty and hunger in our rural settings. This is because these people that are left in the rural areas, are unable to provide for themselves
On the other hand the number of the people that migrate to urban centers can hold. Hence, the end result is congestion of the urban centers, armed robbery and other social vice in the society.
The government, both civilian and military regimes are not unaware of neglect of the rural areas. The testimony of this can be seen in effort pat so far by both past and present regime in Nigeria.
According to Umole (1985) “the government set up a committee in 1960 after the independence to look into the cause of rural-urban drift.” This committee was headed by Dr. Okigbo. This committee reported that rural banking scheme should be setup in the rural areas. To help the unabated rural-urban drift. The stream to these testimonies with the various regimes can also be testified in the regime of president Ibrahim Babangida and his keen determination in rural transformation.to this end a lot of programmes were embarked upon to ensure the successful transformation of rural areas. Some of these schemes include
- Establishment of people bank in Nigeria (PBN)
- Establishment of directorate of food, roads and rural infrastructural (DFRRI)
- Family Support Programme (FSP) was established by the former first lady, Mrs Mariam Abacha in the early part of 1989.
- Poverty alleviation scheme in the first democratic regime of president. Aremu Olusegun Obasanjo. The call for setting up microfinance banks was made known by the federal government during her 1990 budget know by the federal government during her 1990 budget speech but then, the banks was named community banks but later change to micro finance bank in 2006, the central bank of Nigeria began to transform a network of several hundred community banks into “Micro Finance Bank”(MFB)
The impact of micro finance bank on Nigeria economy is the focus of this research project. The project work is aimed at examine the place of micro finance banks and their developmental effect on Nigeria economy. Since bank are regarded as engines and instruments for development, particularly in rural areas oven as Ikere land for living example.
1.2 Statement of the problem
The major problems of people that lives in rural areas, they are manifested under the name lack of infrastructural facilities like good roads adequate housing for the bank staffs social amenities like pipe born water, electricity in the rural areas to enhance smooth business, which affected the existence of micro finance bank in the rural environment.
Other problems include;
- The problem of getting the qualified staffs from the orthodox banks to work in the micro finance banks.
- The problem on how to educated rural dwellers
- The problem of persuading beneficiaries to repay bank their loans further operation
- The problem of security which makes banking in rural area risky.
- The problem of inadequate capital as stated by the recapitalization policy of #2.5 billion introduced by the CBN governor professor Charles C. Soludo.
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