The study investigated the extent to which microfinance banking system in Nigeria has been able to improve the welfare and standard of living of the people through provisions of credits to support existing micro and businesses and start-ups for sustaining new jobs and creations of new ones. The study examined interest on saving deposits payable by the annual microfinance banks, micro credit loans and advances, loan to deposit ratio and liquidity ratios of the microfinance banks. The study tested for normality distribution and unit root in the model using the Andersen-Darling empirical distribution function and Augmented Dickey-Fuller tests respectively. The study observed that that the microfinance banking system in Nigeria made no impact on the welfare and standard living of the people. There is therefore a need for policy review that would make the scheme to benefits the economy and the people and not just only the operators and promoters