Assessment of Rural Sustainable Development by Microfinance Banks in Nigeria

In many developing countries the rural poor are often denied access to financial support because of inadequate infrastructure and pro-urban banking systems. This may be overcome where microfinance systems are introduced. A system of microfinance usually signifies a financial arrangement designed to help the rural poor transform their economic condition. However it can also be viewed as a means to transform rural economic, environmental and social development by empowering communities to find their own solutions to their developmental needs. In order to assess the provision of microfinance systems in Nigeria, and to identify any positive effect on the socio-economic well-being of rural areas, I carried out an analysis of the pattern and the value of loans, advances and credit disbursed to people in different segments of the rural economy over a fifteen year period. The results revealed a major downward trend in the value of credits to rural people compared to the deposits mobilized from them. Hence it appears that there is a net outflow of finance from the rural poor jeopardizing the sustainable development of the rural areas. My research therefore assesses the changes needed in microfinance schemes if the rural poor are to be helped