ABSTRACT

Abstract

This paper is anchored on the informal financial institution and poverty reduction in Ukum local government area of Benue State. The study used primary data collected with the aid of structured questionnaire, personal interview and field survey as well as extensive use of descriptive statistics in analyzing data collected. Percentages and mean scores were employed in determining informal financial institution and poverty reduction. It was found that despite the fact that informal financial institutions are of great importance to the local government in the aspect of providing social services, there also exist a number of problems faced by the informal financial institutions. These problems include; low income, loan disbursement, problem of paying back the loan, loan diversion among others. Thus, informal financial institutions are the bedrock for survival and a mechanism for poverty reduction. Therefore, we recommend that all necessary efforts for the achievement of the targeted goals of poverty reduction to make informal financial institutions have broad impact on the peoples’ wellbeing be sustained. Some of the problems that have hindered member’s effective contribution to the growth of the association should be addressed. The fear of default can be taken care of if members can institutionalize the concept of social capital that places emphasis on trust, information sharing, and the reduction of opportunistic behavior and facilitation of collective decision making. Since majority of the sample population are farmers, the government should make available markets where the farm produce can be sold. This can help in increasing the income level of those living in such areas as saving can be mobilized if income is high. The government should therefore encourage greater funding at educational institutions and skill acquisition in order to train the people living in these areas become more self-reliance.