The purpose of this study is to provide means through which those problems facing small scale can be solved; the significant of this is to provide means in which government can assist microfinance banks will bring lasting solution to those problems facing small scale industries, in the analysis of data collected, the research used descriptive method.

All the data gathered by the researcher were tabulated and analyzed accordingly.

It is included that microfinance banks is an indispensable ingredient for efficient, effective and successful performance of an organization, it also showed that microfinance banks is the source of fund to small scale business. The study of recommendation is that small scale owners should motivate good employees because it is another key success in business enterprises.

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The history of community Banks (Micro finance banks) can be traced to 1990 when general Ibrahim babangida announced the establishment of community banks now microfinance Bank in his 1990 budget speech.

In January 2007, there was a new reform in banking sector which led to changing, its name from community bank microfinance bank. Various effort have been made in the past to extend banking activities to rural areas and improve their banking of which most of the establishment policies could not achieved but the introduction of microfinance bank stands out to the remedy to this problem.

Section 61 of bank and other financial institution act (BOFIA) stated that one of the levels of banking in Nigeria is microfinance bank. This can be seen as bank whose activities are restricted to specified geographical area in Nigeria. Microfinance bank is a scheme introduction by the federal government though central bank of Nigeria aimed at producing financial service to the less privileged which are traditionally not served with conventional financial institutions. Its capital base is twenty million naira (N20,000,000), and this will enhance efficiency in microfinance banking system and increase banking habit among the community dwellers and eradicate poverty.

1.2 STATEMENT OF PROBLEM

Several studies have helped to identify the major problem facing small scale business in Delta State. The primary