INTRODUCTION 

1.1 BACKGROUND OF THE STUDY

According to Adekanya F. (2014) Define Banking habit as the degree as which member of the public patronize banks. The regularity with which individual and corporate bodies in the society make use of banking faculties.
As palne (2014), Rural banking scheme is a programme managed by the central bank of Nigeria in the 1970 and it aims at bringing banking facilities to the door step of rural dwellers.

The first approach used by the commercial bank of Nigeria was mandating the commercial banks to open branches in the rural area, for example in 1977 the central bank of Nigeria mandated the commercial banks to open branches in the rural areas, for example to open 198 branches in the rural area within a period of three years July 1977 to June 1980 unfortunately the commercial banks of Nigeria guidelines. To ensure compliance the central bank of Nigeria used the power it has under section 4 under the banking Act of 1969 tied the approval for the opening of urban branches but all to no avail. Promulgated the microfinance Bank decree no 46 of 1992 which provide for the establishment of microfinance bank.

The microfinance banking system is owned and managed by community or a group of community for the purpose of providing deposit, credit and other banking facilities for the members of the community. The number of microfinance banks has increased greatly from 1991 to date. By the nature, microfinance bank therefore are self sustaining financial institution owned and managed by the community or group of people for the purpose of providing credit facilities deposit banking and other financial services to its members at large on the basis of their self recreation and credit worthiness.
In Nigeria, like in many African countries successive government have implemented various agricultural and rural credit schemes as a means to address perceived shortage of rural credit to stimulate rural employment and productivity under the scheme institutional resources programme efforts and government energies were devoted, through parastatals based top button intervention interventions, to imperial mostly supply financial development funds to rural entrepreneur and small scale farmers ( Graham 2012, Yaron 2012).

In Nigeria, economy has revealed that about 75% of the people living in rural areas has been deprived access to banking facilities Ijera M.O (2016).
And so far, in Nigeria, the problem of rural under development and hence general economic stagnation of the overall economics of the developing countries is inadequate flow of financial resources to the rural areas as well as the channeling of the available resources from the rural to the banking habit of the rural dwellers.

Mobilization and the utilization of owning financial resources are the most important pre conditions for the mordernizing the rural areas and improving the living standard of many. Also, there is a total neglect of the rural community in the scheme of banking expansion and the inadequate of banking expansion and the inadequate of banking facilities generally. The government establishment of rural banking scheme of diffused branch network of bank to all in part of the country the develop banking habit among the people and could build up a banking system that could sustain rapid contribution and balanced development of the economy.

In Nigeria, the rural economy encompasses a substantial propotion of the countries human and natural resources and therefore require large amount of financial resources too in order to develop it. Inspite of the effects with less than expected achievement, rural borrower still encounter difficulties in accessing credit from formal financial institution. It is thus necessary to provide a channel for mobilizing and investing saving in the rural area. Therefore, it was due to the nature of banks in Nigeria economy as a whole coupled with the fact that the federal military government initiated the Rural Banking Programme (RBP) by her geographical size and population was under banked in term of banks and banking sector is the most backward in terms of proportion of the economic unit passing through the banking system (Stanstan 2014).