Leveraging the Private Capital Growth in Nigeria for Entrepreneurial Development through the Informal Sector

Abstract

The Small and Medium Scale entrepreneurs in rural and semi-urban areas lack the necessary financial services especially credit from the Commercial Banks; this is because they are considered not credit worthy. Considering the role credit facilities plays as an important factors of production that helps to transform idea to wealth. The aim of the study is to understudy the mechanics of informal financial sector in promoting Entrepreneurial development activity in urban and rural areas in Nigeria. The study is postulating that informal financial institutions bridges the gap created by formal financial institution. Specific objectives achieved are: to identify the participants in the informal sector, to identify sources of fund from the informal sector, types of informal financial institutions and compare formal financial institutions and informal financial institution. The study adopted a descriptive approach in analyzing the differences in accessing credit from formal financial institutions and informal financial institutions by Small and Medium Scale entrepreneurs in rural and semiurban areas.The study recommended the integration of the informal sector into the Nigeria micro finance system.