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Microfinance banking (MFBs) subsector to the development of any country cannot be overemphasised. The subsector’s importance in developing economies is seen in its contributions to Micro, Small and Medium Scale Enterprises (MSMEs). Since it was introduced in Bangladesh in the mid 1970s, several countries have copied the model of financing, Nigeria inclusive.

MFB has proven to be a successful practice and plays a major role in the development of many African nations. Its introduction into Nigeria, in 2005, recognises existing informal financial institutions and brings them within the supervisory purview of the CBN to enhance monetary stability and to expand the financial infrastructure of the country to meet the financial requirements of MSMEs as well as the unbanked rural population.

Over the Years MFBs have shown that they have great potentials and hold the key to economic development and poverty eradication especially at the grassroots level, this financial subsector is challenged by myriad factors. like the worrisome numbers of Nigerians who operate account with the Micro finance banks.

Secondly, According to CBN, as at July 2011, “Only 82 MFBs service the North-West and North-East geopolitical zones combined – the regions with the highest unbanked rate – compared to over 500 in the South-West and South-East geopolitical zones.

Furthermore, The apex bank also stated that the MFB network serves 3.8 per cent of the adult population (3.2 million clients). Of the 3.2 million MFB clients, 65 per cent use savings products, 14 per cent use credit products and 4 per cent have an ATM card.

Then Lastly, According to EFInA Access to Financial service in Nigeria 2014, only 2.6 million adults have microfinance bank account. This is not surprising since these banks do not operate in real rural centres across Nigeria.