CHALLENGES OF INFORMAL RURAL FINANCIAL INSTITUTIONS IN GWER-WEST LOCAL GOVERNMENT AREA OF BENUE STATE, NIGERIA

Abstract

This study examined the challenges facing the operation of informal rural financial institutions in Gwer-West Local Government Area of Benue State. The specific objectives include; to examine the socio-demographic attributes of the operators of  informal rural financial institutions, the challenges face by informal rural financial institutions to poverty alleviation in Gwer-West Local Government Area of Benue State, Nigeria. Cross sectional design was used in the study. Data was collected using questionnaire and Key Informant Interview (KII). A total number of 398 respondents answered the questionnaire and 26 Key Informants were interviewed. Data collected was analysed quantitatively and qualitatively. The findings revealed that informal rural financial institutions contributed immensely for the poverty alleviation in Gwer-West Local Government Area by improving economic conditions of rural people, it enhanced employment generation, provided credited facilities, capital accumulation, saving mobilization, promotion of socio-economic status and promotion of welfare of members and provided loans for agricultural purposes. Untimely repayment of loans by members, and high interest rate charged to members were some of the challenges faced by the institutions and members in the study area. The study recommended for the government to utilise Informal Rural Financial Institutions in its poverty reduction programmes, since they have been found to be helpful among the rural people in-terms of poverty reduction.