EVALUATION OF PERFORMANCE OF DEVELOPMENT FINANCE INSTITUTIONS (DFIs) AS A POLICY IN ACCELERATING CAPITAL FORMATION IN RURAL FINANCING IN NIGERIA: 2006-2015

Abstract

The proper channeling of funds and allocation of financial resources are important roles expected to be undertaken in the financial system of a country to facilitate productive growth in the rural areas. This necessitated the emergence of Development Finance Institutions (DFIs) to render financial services to the large neglected people (especially in the rural areas) by the traditional banks in Nigeria. Thus, DFIs are expected to offer specialized and micro financial services, offer relative cheap and accessible financing options for agriculture, Small and Medium Enterprises (SMEs) development and other financial products. It is however evident DFIs are not performing their functions properly. It was on this note that this study examined the role and performance of DFIs in rural financing in Nigeria. The study used two DFIs of Bank of Agriculture (BOA) and Bank of Industry (BOI). The data was collected through secondary source of CBN and NBS statistical bulletin and publications from the year 2011- 2015. Multiple regression was adopted as tool of analysis while SPSS 20.0 was used to process the data. The study found that both the BOA loans and BOI loans are positively insignificantly related to rural development in Nigeria for the period under study. It was recommended that the monetary authority (CBN) must continue to appraise and monitor the credit delivery channels and formulate policies that would facilitate the delivery of the facilities for rural financing.