FINANCING ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA THROUGH INFORMAL FINANCIAL INSTITUTIONS

Abstract

This paper examines the complimentary role of the Informal financial intermediaries of raising finance for the development and promotion of entrepreneurship in the Nigerian economy. Entrepreneurship development is globally recognised as a strategy for economic development and growth in both advanced and developing countries.in the areas of job and wealth creation, raw materials source, income generation , poverty reduction among others. Access to credit is seen as one of the factors hindering the growth of entrepreneurship in Nigeria as most Small and medium enterprises ( SMEs) are excluded by the mainstream banks due to collateral requirements. Informal financial institutions are significantly relevant in Nigeria because both the formal financial sector and an informal financial sector (Financial dualism) co- exist to providers finance or credit to the productive sector of the economy. The informal financial sub sector plays a complementary function to its formal counterpart by providing credits to small businesses. The research methodology employed secondary data sourced from the Central Bank of Nigeria (CBN), Small and Medium Enterprises Development of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS). The data analysis reveals that the informal financial institutions serves as alternative financial sources for the development entrepreneurship in the country.