Rural Finance in Nigeria : Integrating New Approaches

Abstract

The rural space is home to 53 percent of
 Nigeria's population and more than 70 percent of its
 poor. While it is well understood in Nigeria that financial
 exclusion of the rural population stunts development, still
 fewer than 2 percent of rural households have access to any
 sort of institutional finance. Access to financial services
 is a key ingredient to rural development: it increases
 incomes through productive investment, helps create
 employment opportunities, facilitates investments in health
 and education, and reduces the vulnerability of the poor by
 helping them to smooth their income patterns over time. A
 lack of rural access to financial services not only retards
 rural economic growth, but also increases poverty and
 inequality. While Nigeria's own long history with
 rural finance shows a clear appreciation for the importance
 of rural access, the persistent absence of sustainable
 access yields important lessons for the future.