Abstract

Over the years, rural dwellers? access to finance through several rural finance and development programs met with unsatisfactory results due to one constraint or the other, hence poverty is still prevalent among rural dwellers. This study therefore probed factors associated with rural dwellers? benefits derived from microfinance bank?s services in Oyo West Local Government Area of Oyo state. Multistage sampling procedure was used to select 105 respondents, interview schedule was used to elicit information on personal characteristics, sources of information, rural dwellers? participation, benefit derived from microfinance banking and constraints faced by rural dwellers in getting microfinance banks? services. Majority (51.4%) of the respondents were between age bracket 40-59 years, male (53.3%) and 46.7% were farmers. They heard about microfinance bank from friends (89.5%) and radio (83.8%) while they participated most in savings plan (61.9%) and business loan (57.1%). They ranked opening of account with very little fund as most important benefit derived with weighted mean score of (132.3). They had low (55.2%) level of benefits while constraints to microfinance banks? services were high interest rate (119.1), short repayment time (116.3) and inadequate fund to save before obtaining loan (113.9) respectively. Although rural dwellers benefited from microfinance banks, amount was generally low due to high interest rate and short repayment time. Therefore, interest rate should be reduced to the minimum level, while grace period for repayment is increased at least to one production year in order to lessen the rural dwellers? rigors of access funds to improve their livelihood.

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