INTRODUCTION The major problem facing African nations today is the eradication of poverty which every government has

built in as part of its development program. The World Bank Report defined poverty as hunger, lack of shelter and being sick and not being able to go to school, not knowing how to read, not having a job and fear for the future among others. When we speak of absolute poverty, we refer to existence below a reference standard of living. Poverty has been analyzed from five dimensions of deprivation among which are economic deprivation drawn from the lack of access to property, income, assets, factors of production and finance. Microfinance is the form of financial development that has its primary aim to alleviate the poverty of the poor who are generally remained un-served or were offered improper financial service. Banks and other financial institutions are currently estimated to provide services to only 25% of potential client worldwide. It has been opined that only 2% of micro entrepreneurs are being provided service by banks. It is also opined that the size of the unsaved market by existing financial institutions is large. The average banking density in Nigeria is financial institution outlet to 32,700 inhabitants and in rural areas, it is 1-57,000 inhabitants that is <2% household have access to financial service. Small business firms can be described as the live wire of a developing economy like of Nigeria. Their role in the economic development can be appreciated by fact that they make substantial contributions to the Gross Domestic Product (GDP). Small businesses serve as a reliable revenue source for the government. Government recognized the need to encourage the small enterprises through the provision of credit and this informed policy reforms that brought about the Microfinance bank that the Federal Government of Nigeria introduced during the Obasanjo regime to replace the formal community banks in Nigeria and the policy became operational in 2005. Microfinance banks are established to fill the gap created by the formal financial sector by improving the socio-economic condition of the poor income generation. Many researchers, development workers and institution hauled microfinance as a potential solution to alleviation of poverty in which standard of living is one of the indicators. Nigerian government recognized the need to alleviate poverty and encourage small enterprises through the provision of credit and this inform policy reforms with respect to bringing the Microfinance bank under the Central Bank of Nigeria to create enabling environment for access to small loans and the policy became operational in 2005. There are still important gaps to be filled by this institutions in Nigeria, the Microfinance banks have not been able to adequately address the gap in terms of credits, savings and other financial services required by the small scale enterprises like barbing saloons, hair dressing saloon, block making outlets, sachet water making industries DEFINITION OF MICRO FINANACE Microfinance is defined as the provision of a broad range of financial services including loans, savings, insurance, remittances and transfers to low-income households and their microenterprises. For the purposes of this paper, focus will be made on the services that are most commonly associated with microfinance - loans and savings. The selection of these two services is also in line with the focus on the banking sector; as these are the two services provided by the banks with microfinance operations.

HISTORY OF MICRO FINANCE The history of microfinancing can be traced back as long to the middle of the 1800s when the theorist Lysander Spooner was writing over the benefits from small credits to entrepreneurs and farmers as a way getting the people out of poverty. But it was at the end of World War II with the Marshall plan the concept had an big impact. The today use of the expression microfinancing has its roots in the 1970s when organizations, such as Grameen Bank of Bangladesh with the microfinance pioneer Mohammad Yunus, where starting and shaping the modern industry of microfinancing. Another pioneer in this sector is Akhtar Hameed Khan. At that time a new wave of microfinance initiatives introduced many new innovations into the sector. Many pioneering enterprises began experimenting with loaning to the underserved people. The main reason why microfinance is dated to the 1970s is that the programs could show that people can be relied on to repay their loans and that its possible to provide financial services to poor people through marketbased enterprises without subsidy. Shorebank was the first microfinance and community development bank founded 1974 in Chicago. An economical historian at Yale named Timothy Guinnane has been doing some research on Friedrich Wilhelm Raiffeisens village bank movement in Germany which started in 1864 and by the year 1901, the bank had reached two million rural farmers. Timothy Guinnane means that already then it was proved that microcredit could pass the two tests concerning peoples payback moral and the possibility to provide the financial service to poor people. Another organization, the caisse populaire movement grounded by Alphone and Dorimne Desjardins in Quebec, was also concerned about the poverty, and passed those two tests. Between 1900 to 1906 when they founded the first caisse, they passed a law governing them in the Quebec assembly; they risked their private assets and must have been very sure about the idea about microcredit. Today the World Bank estimates that more than 16 million people are served by some 7000 microfinance institutions all over the world. CGAP experts mean that about 500 million families benefits from these small loans making new business possible. In a gathering at a Microcredit Summit in Washington DC the goal was reaching 100 million of the worlds poorest people by credits from the world leaders and major financial institutions. OBJECTIVES OF MICRO FINANCE IN NIGERIA 1. Assess and promote the contribution of microfinance to the MFIs 2. Make microfinance more visible for public awareness und understanding as a very important part of the development situation 3. The promotion should be inclusive the financial sector 4. Make a supporting system for sustainable access to financial services 5. Support strategic partnerships by encouraging new partnerships and innovation to build and expand the outreach and success of microfinance for all FUNCTIONS OF MICRO FINANCE BANK

1. Provide Loans The core function of microfinance banks is to provide loans. The Grameen Bank in particular is known for establishing a set of principles for providing loans. For example, an individual loan may be provided to a group of women, with the liability for paying back the loan being distributed to the entire group. Microfinance loans have helped thousands of people in Dhaka, Bangladesh and the surrounding areas stabilize their financial situations. Variations of the Grameen Bank have been created and supported by the World Bank and other nongovernmental organizations, resulting in local, regional, and international microfinance programs. 2. Establish an Economic Presence A core responsibility for microfinance banks is to create a capitalist marketplace where there is not one previously. Microfinance banks are often established in rudimentary Third World conditions (e.g. a hut or small village) and are maintained by a few villagers in the area who work for the bank as representatives of a much larger institution. The banks have a very limited amount of capital and attempt to use it to infuse liquidity into the local economy. The hope is to establish a basic money system, which is easier to use economically than a pure barter system (i.e. trading pots for chickens). 3. Become Self-sustaining According to Yunus, the goal of all microfinance banks is to become self-sustaining. Whereas commercial banks are motivated to make a profit, microfinance banks aim to recoup its costs of running the bank, paying basic wages, and providing loans. As borrowers prosper, they will request more financing and pay a slightly higher interest rate, resulting in the microfinance bank expanding its economic reach within the community as its overall amount of available capital increases. THE JOURNEY SO FAR Every one; the Government, the regulatory authorities, the microfinance practitioners, the poor and small and medium scale entrepreneurs came with so much enthusiasm about microfinance banking in Nigeria when the policy and regulatory framework was launched in 2005. Barely 4 years down the line, there is already great distress in the system and many are wondering why they got hooked up in it. Perhaps the aloof Nigerian elites are after all justified. As always, they dont believe in elevating the poor and see no reasons to put down their moneys to empower the poor. To them, the poor will always be among us so why border with all those stories about empowerment or poverty reduction or eradication. Many Nigerians ran into setting up microfinance banks because they believed it was a business that would enable them amerce more wealth particularly with the governments pronouncements that N50 billion shall be pumped into poverty alleviation in Nigeria.. Others ventured into it because it appeared to be a good employment avenue for the thousands of Nigerians who lost their jobs during the banking consolidation of the Soludo Apex banking era. Only a few went into microfinance banking with a passion to alleviate poverty in Nigeria. LIST OF MICROFINANCE BANKS IN NIGERIA

Documented records show that there are over 900 Microfinanc Banks licensed by the Central Bank of Nigeria. Among them are the following 200 MFBs: 1 AACB Microfinance Bank Limited 2 AB Microfinance Bank Limited 3 Abatete Microfinance Bank Limited 4 ABC Microfinance Bank Limited 5 Abia State University Microfinance Bank Limited 6 Abigi Microfinance Bank Limited 7 Abokie Microfinance Bank Limited 8 Abriba Microfinance Bank Limited 9 Accion Microfinance Bank Limited 10 ACE Microfinance Bank Limited 11 ACFL Microfinance Bank Limited 12 Achina Microfinance Bank Limited 13 Acme Microfinance Bank Limited 14 Acorn Microfinance Bank Limited 15 Active Point Microfinance Bank Limited 16 Acuity Microfinance Bank Limited 17 Adaigbo Microfinance Bank Limited 18 Adazi- Nnukwu Microfinance Bank Limited 19 Adazi-Ani Microfinance Bank Limited 20 Adazi-Enu Microfinance Bank Limited 21 Addossar Microfinance Bank Limited 22 Adif Microfinance Bank Limited 23 Adkolm-Emerald Microfinance Bank LImited 24 Afam Microfinance Bank Limited 25 Afemai Microfinance Bank Limited 26 Afotamodi-Ogunola Microfinance Bank Limited 27 Afribank Microfinance Bank Limited 28 Agbarho Microfinance Bank Limited 29 Agbelo Microfinance Bank Limited 30 Agbowu Microfinance Bank Limited 31 Agosasa Microfinance Bank Limited 32 Aguda Titun Microfinance Bank Limited 33 Aguleri Microfinance Bank Limited 34 Ahetou Microfinance Bank Limited 35 Ahmadu Bello University Microfinance Bank Limited 36 Aiyepe Microfinance Bank Limited 37 Aiyetoro Gbede Microfinance Bank Limited 38 Ajasse-Ipo Microfinance Bank Limited 39 Aja-Yejebwo Microfinance Bank Limited 40 Ajeko Microfinance Bank Limited 41 Ajewole Microfinance Bank Limited 42 Ajiya Microfinance Bank Limited 43 Ajose Microfinance Bank Limited 44 Ajuta Microfinance Bank Limited 45 Akalabo Microfinance Bank Limited 46 Akesan Microfinance Bank Limited 47 Akin Microfinance Bank Limited

48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97

Akokwa Microfinance Bank Limited Akpo Microfinance Bank Limited Akpor-COE Microfinance Bank Aku Diewa Microfinance Bank Limited Akwengwu Microfinance Bank Limited Alache Microfinance Bank Limited Al-Barakah Microfinance Bank Limited Alekun Microfinance Bank Limited Aliero Microfinance Bank Limited Alkaleri Microfinance Bank Limited All Workers Microfinance Bank Limited Alliance Microfinance Bank Limited Allover Microfinance Bank LImited Allstar Microfinance Bank Limited Aloaye Microfinance Bank Limited Alor Microfinance Bank Limited Altitude Microfinance Bank Limited Alvana Microfinance Bank Limited Amaifeke Microfinance Bank Limited Amazing Grace Microfinance Bank Limited Amba Microfinance Bank Limited Amoye Microfinance Bank Limited Amram Microfinance Bank Limited Amucha Microfinance Bank Limited Amuro Microfinance Bank Limited Anchorage Microfinance Bank Limited Aniocha Microfinance Bank Limited Anya Microfinance Bank Limited Aogo Microfinance Bank Limited Apa Microfinance Bank Limited Apeks Microfinance Bank LImited Apex Microfinance Bank LImited Apple Microfinance Bank Limited Aracom Microfinance Bank Limited Aramoko Microfinance Bank Limited Argungu Microfinance Bank Limited Arochukwu Microfinance Bank Limited Arondizuogu Microfinance Bank Limited Asabari Microfinance Bank Limited Ascent Microfinance Bank Limited Asha Microfinance Bank Limited Aspire Microfinance Bank LImited Asset Matrix Microfinance Bank Limited Assets Microfinance Bank Limited Associated Investment Trust Microfinance Bank Limi Astra Polaris Microfinance Bank Limited Atlas Microfinance Bank Limited Atta Nwambiri Microfinance Bank Limited Atyap Microfinance Bank Limited Auchi Microfinance Bank Limited

98 Avalon Microfinance Bank Limited 99 Avyi Microfinance Bank Limited 100 Awe Microfinance Bank Limited 101 Awgbu Microfinance Bank Limited 102 Awka Microfinance Bank Limited 103 Awka-Etiti Microfinance Bank Limited 104 Awkuzu Microfinance Bank Limited 105 Ayete Microfinance Bank Limited 106 AZSA Microfinance Bank Limited 107 Baba Microfinance Bank Limited 108 Babura Microfinance Bank Limited 109 Bakassi Microfinance Bank Limited 110 Balera Microfinance Bank Limited 111 Balogun Ajikobi Microfinance Bank Limited 112 Balogun Fulani Microfinance Bank Limited 113 Balogun Gambari Microfinance Bank Limited 114 Bam Microfinance Bank Limited 115 Bama Microfinance Bank Limited 116 Bancorp Microfinance Bank Limited 117 Barnawa Microfinance Bank Limited 118 Bauchi Investment Corporation MFB Limited 119 Bejin-Doko Microfinance Bank Limited 120 Bekwarra Microfinance Bank Limited 121 Berachah Microfinance Bank Limited 122 Best Star Microfinance Bank Limited 123 Bestway Microfinance Bank Limited 124 Bethel Microfinance Bank Limited 125 Bethseda Microfinance Bank Limited 126 Beulah Microfinance Bank Limited 127 BFL Microfinance Bank Limited 128 Biraidu Microfinance Bank Limited 129 Birni Microfinance Bank Limited 130 Birnin Kudu Microfinance Bank Limited 131 BishopGate Microfinance Bank Limited 132 Biyama Microfinance Bank Limited 133 Biztrust Microfinance Bank LImited 134 Blue Intercontinental Microfinance Bank Limited 135 Blue Ridge Microfinance Bank Limited 136 Bmazahin Microfinance Bank Limited 137 BOI Microfinance Bank Limited 138 Boji Boji Microfinance Bank Limited 139 Boluwaduro Microfinance Bank Limited 140 Bonded Microfinance Bank Limited 141 Bonghe Microfinance Bank Limited 142 Bonny Microfinance Bank Limited 143 Borgu Microfinance Bank Limited 144 Bosak Microfinance Bank Limited 145 Bowman Microfinance Bank Limited 146 Brass Microfinance Bank Limited 147 Bristol Microfinance Bank Limited

148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197

Briyth Covenant Microfinance Bank Limited Broad Based Microfinance Bank Limited Broadview Microfinance Bank Limited Brooks Microfinance Bank Limited Bukuru Microfinance Bank Limited Bungudu Microfinance Bank Limited Bunkasa Microfinance Bank Limited Business Support Microfinance Bank Limited Busu Microfinance Bank Limited Calabar Microfinance Bank Limited Calm Microfinance Bank Limited Capital Microfinance Bank Limited Capstone Microfinance Bank Limited Cardinal Rock Microfinance Bank Limited Caretaker Microfinance Bank Limited Cash Cow Microfinance Bank Limited Cashjet Microfinance Bank Limited Castle Microfinance Bank Limited Catland Microfinance Bank Limited Cedar Microfinance Bank Limited CEDEP Microfinance Bank Limited Century Microfinance Bank Limited Chanelle Microfinance Bank Limited Chat Microfinance Bank Limited Chevron Employee Co-operative MFB Chibueze Microfinance Bank Limited Chidera Microfinance Bank Limited Chigbe-Yaji Microfinance Bank Limited Chikum Microfinance Bank Limited Chukwunenye Microfinance Bank Limited Circular Microfinance Bank Limited Citadel Microfinance Bank Limited Citigate Microfinance Bank Limited Citiserve Microfinance Bank Limited City Microfinance Bank Limited City Mission Methodist Microfinance Bank Limited Civic Microfinance Bank Limited CKC Microfinance Bank Limited Classic Microfinance Bank Limited Coalcamp Microfinance Bank Limited Coastline Microfinance Bank Limited Coconut Avenue Microfinance Bank Limited Combined Benefits Microfinance Bank Limited Common Benefit Microfinance Bank Limited Common Trust Microfinance Bank Limited Compass Microfinance Bank Limited Complete Trust Microfinance Bank Limited Confidence Microfinance Bank Limited Confluence Microfinance Bank Limited Congress Microfinance Bank Limited cv

198 Conpro Microfinance Bank Limited 199 Consumer Microfinance Bank Limited 200 Convenant Microfinance Bank Limited limited

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CBN,2005,Microfinance Policy Regulatory and Supervisory Framework for Nigeria. Abuja: CBN. Conroy, J. D., 2003, The Challenges of Micro financing in Southeast Asia. Singapore: Institute of Southeast Asian Studies. Eboh, E. F., 2008, Changing Development Paradigms via Microfinance Banks. African Journal of Entrepreneurship, 1(1), 52-63. Iorchir, D., 2006, Reducing Poverty in Benue State of Nigeria: The Role of Microfinance and Micro-Enterprises. Journal of Business Management, 1(2), 15-29. Jaffari, S. I. A., Saleem, S., Abideen, Z. U., Kaleem, M. M., Malik, N. &Raza, M., 2011,An Examination of Challenges and Prospects of Microfinance Sector of Pakistan. Europe Journal of Economics, Finance and Administrative Studies, Issue 31, 146 159. Mohammed, A. D. and Hassan, Z., 2009, Microfinance in Nigeria and the Prospects of Introducing and Islamic Version in the light of Selected Muslim Countries Experience. Review of Islamic Economics, 13(1), pp. 115-174 Nwankwo, O., 2008, Micro Credit Financing and Poverty Reduction in Nigeria: Challenges and Prospects. Journal of Business Administration and Management, 3(1), 41-46. Okpara, G. C., 1990, Informal Financial system in Economic

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