The development of a local economy involves several prongs and coordinated approaches, and it is argued here that a vital and central component needed for such efforts is the availability of long term credit sources that can appropriately address the needs of such development. This study describes the existing suppliers of credit in a 3rd class municipality and the different operating characteristics of their credit services. Attempts were made to rationalize the conditions of their credit extension, especially in their relation to stimulating and even sustaining local development. A qualitative research methodology was employed particularly a survey that was supplemented by an interview with key informant. Findings show that credits are short term in nature with high costs to borrowers; credit conditions are tailored to the benefit of the creditors. This study further argues that risks to the providers of credit in rural areas are high, and incentives should be provided by the government to encourage formal institutional lenders to provide long-term funds and further stimulate local development in the rural areas.