The Informal Financial Institutions and Poverty Reduction in Nigeria

Abstract

This study investigated the relationship between informal financial institutions and poverty reduction in Nigeria. The study adopted a descriptive survey method comprising a sample of 267 respondents from Owerri North and Owerri West Local Government councils of Imo state. Data were sourced using structured questionnaire and analysed using simple percentage and descriptive statistics. Findings revealed that informal financial institutions have positively influenced poverty reduction in Nigeria. The study therefore recommends that collaboration is more optimal needle-moving strategy between the formal and informal financial institutions and this will ensure sustainable financial inclusion in Nigeria. The informal providers are a lucrative vertical for the formal financial service sector because they have already done a lot of the heavy lifting of financial inclusion. Again, there is urgent need for government to utilize the informal financial institutions in its poverty alleviation programmes most especially in this COVID-19 period

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