ABSTRACT The major purpose of this study was to assess whether credit schemes has got substantial relationship with rural development. Find out how rural development can be achieve through running some mall micro credit institutions with the local community and determine peoples’ attitudes towards it. Micro credit institutions basically handle small savings, giving small loans to identified beneficiaries and they normally generate their funding from the membership fee collections, pre-loan deposits of each member however there are still challenges facing the running of these credit institutions in addressing the problem of rural development. To ensure that the above arms were reached, data collected from various sources (both qualitative and quantitative) and priorities were also given to books, quotations from texts, and other publication among others that seemed to have addressed related topic as of the study. The finding were that the functioning, performance and contribution of this credit institution has greatly enhanced the capacity of rural people in achieving rural development because it has increased their participation both in the economic activities and community development adventures in decision making. The finding also suggested that improved strategy in managing these micro credit institution such as improved security situation, provision of soft loans, provision of social services, improved accessibility of factors of production and sensitization would enhance the development ofrural population.