Informal Sector, Micro Credit Delivery and Entrepreneurial Development in Nigeria

The informal sector particularly the international donor agencies as well as international and local NGOs are offering considerable assistance in developing countries to ensure that the less privileged individual who have no link with the formal financial system are not completely left behind in the developmental process. In this regard, this paper examines the role of selected NGOs engaged in micro credit delivery across the country. Interestingly, the results show that the 'membership and outreach' of these institutions has been expanding greatly. However, the overall effective cost of credit from these institutions is too high to encourage entrepreneurs. While the study advice on the need to encourage the establishment of more of these institutions, it cautioned that these institutions should demonstrate greater willingness to cope with very narrow profit margin. This and the government ability to achieve lower inflation rate can bring about a reduction in the cost of credit from these informal sources