INTRODUCTION

Recent developments in African and other developing countries reinforce the contention that microfinance or micro- credit structures are essential for development of rural areas in consideration of the fact that areas of development in the these countries have been traditionally urban-centered. As has been argued by (UNCDF), the development of microfinance institutions over the last two decades and a number of success stories have lent credence to the idea that microfinance is a major stimulus for development in evolving economies and that is a powerful instrument for combating poverty. Invariably, microfinance programmes constitute and provide the drive to develop a "broad access" to the financial resources crucial to the poor

When properly harnessed, microfinance offers a variety of benefits to the African people. Foremost, microfinance initiatives can effectively address material poverty, the physical deprivation of goods, services, and the income to attain them. When properly guided, the material benefits of micro-financing can extend beyond the household into the community. At the personal level, microfinance can effectively address issues associated with “non-material poverty, which includes social and psychological effects that prevent people from realizing their potential.