BACKGROUND OF THE STUDY
In Nigeria, government has initiated series of micro credit programmes targeted at the unemployed youths and poor Nigerians with the overriding objective of making credit readily available to those who where traditionally denied access to credit such credits in the world over were used for the development of small and medium scale enterprise, which has been described as the springboard for sustainable development. In all emerging economies like Nigeria, the government has shown a great concern for the development of small and medium scale enterprises because of the underlying socio economic factors plaguing the nation. Some of the reasons include: that past policies failed to generate efficient self sustaining impetus needed to uplift the country to the take-o stage of growth, the increased emphasis on self reliant approach to the development and the recognition that dynamic and growing of petty-business can contribute substantially to a wide range of developmental objectives.
However, the full potential of the micro business in the development process have been realized owing to numerous bottle-neck (Olaitan, 2004). In the light of this, the Central Bank of Nigeria (CBN) as part of its reform agenda, initiated Banks, a policy initiative aimed at bringing credit to the door step of the unemployed youths and poor Nigerians who do not have such access under the conventional financial system. The thrust of this project is to articulate the prospects of the Banks towards boosting the performance thereby reducing the level of poverty and enhancing employment generation (Honohan, 2005). Business credit availability of small and medium scale enterprises came into being in December, 2007, with the establishment Banks. It was packaged to address the issue of cultivating appropriate modern banking habits in the rural areas, through the social local institution such as community social clubs and other individuals who are encouraged to be co-owner of the bank through the purchase of shares. The government came in as a second tier supervisory agency through the National Board of Bank (NBMFB) to oversee the establishment and operation.