Microfinancing despite the fact that has been practiced in advanced countries but the gadget simply gained prominence in developing and emerging economies in the start of the millennia. From my non-public revel in as I actually have worked with 4 distinctive microfinance agencies, I can boldly say that the device could be very green and useful, particularly to micro or small and medium scale enterprises or marketers, consequently the want for the viability and sustenance witnessed in the sector and industry. In my sophomore and especially in Development Economics class in 2003/2004 instructional session, we were given an project on assessment of Nigeria and Bangladesh using emerging micro-financing quarter in both countries. Then the monetary cum financial concept of cash lending and micro-financing changed into gaining momentum and popularity within the 0.33 world and in these economies. Sequel to the existing fact that Nigeria and Bangladesh have some monetary similarities in phrases of shape, population, level of improvement, income organization and comparatively extraordinary marketplace economies.
Objectively, this article is targeted on Microfinance banks in Nigeria, as at 2004 the world has had roots in Bangladesh and was emerging in Nigeria. We had few Microfinance banks in Nigeria prior to the millennial, that become if any existed genuinely, handiest finance houses acted as creditors, identical because the numerous business banks, and their services, hobby charges on loans were no longer for the attention of small and medium scale corporations (SMEs) or traders. Then came the Microfinance banks and establishments which have been contributory to SMEs, GDP and Nigerian financial system. The obtainable economically stays that SMEs are financial agents which help power the financial system as they bridge the space among the multinational businesses or corporations and the direct customer. The small and medium-sized investments or investors also have responsibilities which span their role as one of the factors of manufacturing to main actors in channels of distribution as they act as middlemen between manufacturer or producer’s connection to shops and direct customers. More so, SMEs are the backbone which pivots the economic activities of micro and medium corporations or ventures, a pillar and helping shape of small and medium entrepreneurs and traders. Therefore, this sector of the economy which has the ability to force an economic system to a kingdom of feasible capability building in the trade and industries want investment, credit and financing. These are functions that microfinance banks have come to obtain as the Nigerian authorities eventually keyed to the program in yr 2005.