CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Nigeria is an immensely endowed country in both natural and human resources, with the population of over 140 million people who are largely engaged in the farming sector and small scale business. This sector is primarily dominated by micro, small and medium scale enterprises (MSMEs) and both peasant farmers who require financial assistance to boost their business and improve their livelihood. However, lack of access to formal financial assistance has constrained their development in the country. Microfinance bank in Nigeria has no been affecting people life in the time past due to unavailability of fund at their disposal and government policy that has constrained their activities and relegate it to the background. Kudos should be given to the Central Bank of Nigeria Governor who has greatly revolutionalised the banking sector through bank consolidation and turned the community banks into microfinance banks. In the same vein, it is very diicult for a common man to receive loan from banks like UBA, First Bank, Skye Bank etc. due to lack of Collateral security but microfinance has made it possible to receive loan with little or no collateral. These microfinance banks have gone to the extent of buying tools, paying for shops and providing business capitals to enterprises. However, the problem is even with the creation of microfinance banks, what benefits has the sector derived from them over the years.
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