Research Objectives: The study examined the impact of Informal Financial Institutions (IFIs) on Socio-Economic Development in Nigeria. Specific objectives include: determine if Informal Financial Institutions have impacted on poverty reduction in Nigeria; ascertain if Informal Financial Institutions have access to credit facilities in Nigeria economy; find out the level of investment of Informal Financial Institutions in the Nigeria economy.
Methodology: The study adopted a descriptive survey design with a sample of 200 respondents. Questionnaires were used to collect data from members and non-members of Informal Financial Institutions unions. Data collected were analysed using frequency, percentage and mean score. Chi-square was employed in the test of hypotheses using a statistical program for Social Sciences (SPSS).
Findings: Informal Financial Institutions were more effective in reducing poverty among members in unions than non-members. Furthermore, members of Informal Financial Institutions in unions access credits more easily than non-members. Lastly,Informal Financial institutions were more effective in promoting investments among members than non-members.
Conclusion: IFIs have capacity in promoting socio-economic development in Nigeria.
Recommendations: Government should encourage and empower IFIs to reduce poverty level in Nigeria through credit availability which will increase the level of investments among the Informal Financial Institutions operators.