Influence of Informal Financial Institution on Poverty Reduction in Enugu State – Nigeria

Informal financial institutions are those financial institutions found in the rural areas through which rural dwellers save their money on a short term basis and also source funds when they are in need. This paper examined the influence of rural informal financial institutions in achieving poverty reduction in the area of the study. It was observed that rural dwellers are handicapped when it comes to financing any meaningful project. It is equally very difficult for them to raise enough funds, especially from formal financial institutions to make small scale investments hence the vicious circle of poverty. The data used were from primary and secondary sources. Two hundred and fifty 250 respondents were chosen using Random Sampling Technique and two hundred and thirty five 235 answered and returned their questionnaire. The analysis was done using descriptive statistics. The result revealed that for all the informal institutions, their main source of fund constitute the monthly due contributed by members, that the majority of rural dwellers save between N6, 000 – N10,000, that the majority of the rural institutions disburse loans on providing an acceptable surety and it constitutes 64 . The study concluded that informal financial institutions have a great influence on poverty alleviation in Enugu State Nigeria. Among others, it was recommended that the institutions should strive to increase savings to disburse more loans to the applicants for meaningful projects. Aniagu Lauretta Ngozi | Nwankwo Frank "Influence of Informal Financial Institution on Poverty Reduction in Enugu State – Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd46271.pdf Paper URL: https://www.ijtsrd.com/management/business-economics/46271/influence-of-informal-financial-institution-on-poverty-reduction-in-enugu-state- – -nigeria/aniagu-lauretta-ngozi