THE EFFECT OF MICRO CREDIT ON DELTA STATE ECONOMY A CASE STUDY OF UGHELLI NORTH L.G.A

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY
The history of development and what currently obtains globally sasses that it was is and will be difficult to divorce credit from business. Everyone will need credit in one form of the other someday.
In relation to economic development of Delta State, businesses both new and established will require it. Delta State government often resort to credit from local banks or foreign banks much of the credit which are properly channeled into profitable business or investment to increase the production of goods which will be sold partly at home and partly at the international market. Since no nation is entirely independent credit takes many forms; it could be a loan (cash) given by a creditor to enable another implement a business initiative. It could also be given inform of asset or raw materials, such assets which are acquired for business purposes and which is valuable and useful to sustain growth of the society; Ughelli; as a case study which have Micro-Finance Banks like Wetland Micro-Finance Banks Plc in Ughelli.
Assets such as land (free holder lease hold), factory building, ware house, plant and machinery motor vehicle, furniture and fittings etc. and also as raw materials which when transformed into finished goods can be distributed as goods and services; such as the supply of raw materials to factories which are raw cottons, raw sugar. Raw wool which when acquired and transformed into finished products would increase production and also the profitability of small; and medium scale enterprises.

Without much credit new businesses in Ughelli cannot take off entrepreneurs, innovators with their ideas may die or remain with their ideas in exposed and unrealized. Thereby creating a setback or a vacuum in areas or segment of economy where such ideas would be relevant and needed for economic development. The Delta State Governor Dr. Emmanuel Uduaghan has imitated the 3rd inversely of the Micro credit scheme that will positively touch the lives of those at the grassroots as well as the urban poor this micro credit scheme with one of the most honest, transparent, caring and facilitating programmes to boost the status of the beneficiaries to a higher level of production, through the medium credit facility, the micro finance banks which will provide funds and loans to investors and small scale producers to engage in productions and employ other deltas and unemployed citizens thereby reducing the rate of unemployment in the society, reduced crime rate in delta state. Since companies would go the capital market to source for funds to invest in production, the delta state micro credit scheme headed by Dr. Anthonia Ashiedu has been financially aggrandized by the state government and other agencies like (Nor fund) national economic reconstruction funds, (seeds) state economic empowerment and development strategies and partnering with the various Micro- Finance banks and inject much funds into the scheme to enable then empowered beneficiaries to produce more goods and services to meet the needs of the state; and generate more income in the state. The micro credit scheme will impact lives of the citizens, raise their standard of living, bring about meaningful development of the economy and all the sectors of the state, and society.

STATEMENT OF THE PROBLEMS
It is worthy to note that banks as well as micro credit agencies have come to the realization that proper micro credit management and findings from both delta state government and other financial institutions within or outside the state would be essential and adequate for the state would be essential and adequate for the economy development of Delta State.
However the statement of the problem is therefore to look at the in adequacies and the inefficiency of the Delta State Micro credit schemes in rural and urban areas; using Ughelli as a case study. The challenges faced by micro credit schemes in actualizing development programmes I the state.

PURPOSE OF THE STUDY
The primary goals of this study are to investigate the effects of micro credit on the Delta State economy to identify the usefulness of micro credit to the economy development Delta State.
Therefore the outline goals and objectives below are related to the purpose of this study.
To encourage the spirit of entrepreneurship and zeal for self independency amongst its rural and urban dwellers.
To revigorate the micro credit scheme, its level of operations and transform the standard of living of Delta State citizens to a higher level.
Increase the rate of production of goods and services it will make access to credit available and sufficient for production.

RESEARCH QUESTIONS
The researcher in the course of carrying out this study has derived some questions that will be examined and enable us to profer alternative and suitable answers to the existing problem. The questions are outlined below.
Does a well planed and implemented micro credit program entrance and increase productivity.
Does creditor loan given by micro credit agencies and financial institutions adequate enough to meet financial requirement of entrepreneurs in Ughelli?
Are all micro credit funds channeled to the productive areas or sectors of the economy?