Abstract
There is no gainsaying in the fact that rural finance serves as the cornerstone for rural economy development in that there could not be smooth sailing of economy activities without the continuing flow of money and credit. This shows the relevance of financial institutions in the economy development of any nations which cannot be overemphasized. The study however assessed the socio-economic factors that determined the choice of informal bankers among rural households in south-western Nigeria. A multi-stage random sampling procedure was used in the course of the study. Two states were randomly selected out of the six states of the zone of which a total of 300 rural households were selected. A well structured questionnaire was employed to collect data from the respondents. Descriptive statistics such as frequency count, percentage distribution and probit regression were used to analyze the data collected. The result shows that socio-economic characteristics such as age, sex, income and traditional leadership were the most prominent factors that affect the choice of informal bankers. It was discovered that rural households are seriously faced with constraints such as low level of income, access to financial credit as well as fear of fraudulent bankers that is common to informal financial sector. It was recommended that formal bankers should extend their services to rural households through the activities of the informal financial institutions so as to boost rural micro enterprises.