ABSTRACT

This research work was designed to analyze the effect of microfinance banks on rural income in ahiazu-mbaise L.G.A, Imo state. It specifically looked at the socio-economic characteristics of the benefiting and non-benefiting rural dwellers, while also ascertaining the eligibility criteria. adapted by the microfinance banks in granting credit to clients, furthermore it determined the effect of microfinance bank on rural income, analyze the performance of microfinance bank in credit delivery, identify the challenges facing the microfinance banks and also to identify factors that influences rural dwellers access to credit from microfinance banks. Primary and secondary datas were used in this in this research; primary datas were obtained from 1 20 respondents who were randomly selected, this was made up to 60 beneficial and 60 non-benefiting rural dwellers; A well structured questionnaires were administered on the respondents ,while the secondary data were collected from documentation of microfinance banks. Analysis were carried out the use of such statistical and econometric tools like frequency, tables, percentages and the use of multiple regression. The result of data analysis shows that the mean age of beneficiaries and non beneficiaries were 41 and 40 years. Respectively Majority of the responde its were small holder farmers, married and literate. Total amount of loan repayed in twenty years was NI 2,400,00 with an outstanding debt of Ni ,600,000. This result implies that Imo State is poor and may be as a result of insufficient funds to meet the needs of the rural dwellers. The study recommended that funds should therefore be made available to rural dwellers through microfinance banks in order to enable them purchase important inputs and increase productivity. This would ensure the sustainability of the programme in rural area. Also for a better outreach to be achieved, target population should be encouraged through warrens creation to join co-operative societies and to adopt technologies recommended to farmers by the programme.