THE IMPACT OF MICROFINANCE BANKS IN STIMULATING THE BANKING HABITS OF RURAL DWELLERS IN NIGERIA

The Central Bank of Nigeria in December 2005 published regulatory and supervisory framework for the regulation of microfinance banks and mandated all community banks operating in the country to submit to it plans for conversion latest by September 30th, 2006 and to finally convert latest 31st December, 2007. 
The practice of microfinance banking in Nigeria is culturally rooted and dated bank to several centuries. The traditional microfinance institution provides access to credit for the rural and urban dwellers and low income earners. They are mainly of the informal Self Help Groups (SHGs) or Rotating Saving and Credit Associations (RSCA) types. Other providers of microfinance services includes saving collector and cooperative societies.   In order to enhance the flow of the financial services to the Nigeria rural areas, Government has in the past initiated a series of publicity financed micro credit progarmmes and policies targeted at the poor.
This research work will basically treat the impact of microfinance banks in stimulating the banking habit of the rural dwellers in Nigeria. Furthermore to look into the features of microfinance banking and how it stimulates the banking habit of the rural dwellers in Nigeria.
The objectives of the study is to know the impact of microfinance banks on the banking habit of people in Nigeria and also to make recommendation on how such microfinance banks can improve their services so as stimulate the banking habit of the people in Nigeria especially those living in the rural parts of the country. Also to know the rapid enhancement of the development of productive activities in the rural areas, hence, the improvement of the economic status of both the rural people and the promotion of the emergence of an effective and integrated national financial system that responds to the needs of the whole economy.
Hypothesis I
Ho:  Microfinance banking does not enhance the development of banking habit
Hi:   Microfinance banking enhance the development of banking habit.        
Hypothesis II
Ho:  Microfinance banks services are geared towards the peasants rural dwellers and small scale business with a view of developing the banking habit of people.
Hi:   Microfinance banks services are geared towards the rich, urban dwellers and large scale business with a view of developing the banking habit of people.
The study has revealed the importance and the impact of microfinance banks on the banking habit of rural dwellers, most especially the contributions of Royal Trust Microfinance banks on the development of the banking habits of people in its environs. The result of the study will be useful to the following:
i.  Government: The result will be useful to the three tiers of government as well as the arms of government in formulating their respective policies as touching the monetary and economic policies.   
ii.  Communities: Local communities (towns and villages) will find the result of the project useful in the area of determination and creation of small scale community based employment opportunities for the dwellers.
iii.   Individuals and Corporate Bodies: This set of people will find the result of the project useful in the area of mobilization of credit for smooth running of their businesses in the case of corporate bodies and in the area of building savings for self actualization.
This research is centered on the impact of microfinance banks in simulating the banking habit of rural dwellers in Nigeria. Royal Trust Microfinance Bank is used as a case study for the purpose of the research work. This research wok has suffered some set back by ways of saving access to some vital information and documents. Also on the case of the research work, there is a financial problem faced before the completion of this research work.
1.6       HISTORICAL BACKGROUND OF THE CASE STUDY
Royal Trust Microfinance Bank was incorporated on February 21st, 1992 as Ifako / Iju Ishaga Community Bank. In the year of incorporation, the bank carried out community banking services. The services performed by the bank include opening of savings, time and demand deposit accounts and Ajo or Esusu daily contributions from market women or sole traders. 
However, this name was changed to Royal Trust Community Bank Limited effective from July 31st, 2003 as a result of re-engineering and recapitalization processes by the new stakeholders.
The bank later changed to Royal Trust Microfinance Bank due to the recapitalization and restructuring of community banks to microfinance banks by the Central Bank of Nigeria. The corporate address of the bank is at 25, Agbdo Roa, Iju-Ishaga, Lagos.