THE ROLE OF COMMUNITY BANKS IN RURAL DEVELOPMENT

By

OKORO CHINEMEREM. A.

Presented To

Department of Banking and Finance

ABSTRACT

Community banks were established in Nigeria to help remedy the rural development problem that has been facing Nigeria since after world war II.

The fundamental concepts of a community bank is of a selt sustaining financial institution, owned and managed community or group of communities for the purpose of community of group of communities for the purpose of providing credit deposit, banking and other financial services to it members largely on the basis of their self recognition and credit worthiness.

(1) The major finding of this study shows that community banks bring banking services to the community where commercial banks does not exist.

(2) Community bank greatest customers are the low income workers.

(3) That bank also offer other non-banking services notable mass transit transport services on a subsidized rate.

(4) The greatest problem facing community bank is lack of adequate finance.

TABLE OF CONTENT

Title Page II

Approval Page III

Dedication IV

Acknowledgement V

Abstract VII

Table of Content VIII

CHAPTER ONE

INTRODUCTION 1

1.1 General Introduction 1

1.2 Background of the study 1

1.3 Statement of the Problem 3

1.4 Objective of the study 3

1.5 Significance of the study 4

1.6 Limitation of the study 6

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Introduction 8

2.2 Rural banking scheme in Nigeria 12

2.3 Nature and concept of community banks 12

2.4 Venture bank control measure to community banks 17

2.5 Functions of community banks are folding 20

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Research design 25

3.2 Area of study 25

3.3 Source of study 26

3.4 Method of data presentation 26

3.5 Method of data analysis 27

Reference 28

CHAPTER FOUR

4.1 Summary of findings 29

CHAPTER FIVE

5.1 Recommendation 32

5.2 Conclusion 33

Bibliography. 35

CHAPTER ONE

INTRODUCTION

This introduction is many concerned with the effort of community banks in rural development which is backwards due to certain problems that hinder them, such as infrastructural facilities, shortage of manpower, problem of security and so on.

1.1 BACKGROUND OF THE STUDY

The evolution of community banks in Nigeria can be traced to the 1990 budget when the president formally announced the introduction of the programme. It was men for recognition of the peculiarities of the rural communities and the need to monetize and integrate the rural economics into the banking system.

Meanwhile the word community bank, it can be seen as a self sustaining financial institution owned and managed as a community of group of communities for the purpose of crewing deposit, providing credit facilities and other banking a financial services to its members largely on the basis of their self recognition and credit worthness.

Despite that, in July 1990, the community banks implementation committee (CBIC) was set to work out the modalities for the establishment of community banks. Having produced all the necessary documents for the establishment of community banks, the CBIC commissioned a number of community banks to operate before the setting up and inauguration of National Board for Community Banks (NBCB) on July 16, 1991. The NBCB with more executive powers and the responsibility for the overall supervision of community banks, placed the CBIC. The first community bank commenced operation in December, 1990.

A bank licenced under community bank decree shall accept deposit of all type from people including savings and time savings. To receive or collect money on behalf of customers. Providing banking services to people as in giving out loans and after financial facilities.

1.2 STATEMENT OF THE PROBLEM

The statement of the problem were stated as follows.

1. How loan can be made available to rural drivellers or borrowers?

2. how can rural banking system be improved to help in rural development?

3. how to foster community ownership and use of economic assets?

4. how can loan secured other then asking for tangible security like collateral ?

1.3 OBJECTIVE OF THE STUDY

The objectives makes the researcher to know the role of community banks in rural development. It reveals the following objectives.

1. The promotion of rural development by providing financial and banking services to communities inadequately supplied with such services.

2. to find out possible area of interest the community bank can invest on.

3. to find out the external to which improvement on banking habit is dependent on the level of banking awareness campaign. S

4. to mobilize fund through the issuance of debentures to interested parties or members of rural dwellers.

5. to maintain and operate various types of account with or for other banks in Nigeria.

6. the inculcation of disciplined banking habits among the masses of low income workers in Nigeria, especially in rural areas.

1.4 THE SIGNIFICANCE OF THE STUDY

It helps the government especially the rural banking development authority to give the community bank opportunity assess their performance in rural development. The study also is attempt to achieve the promotion of rural development by providing financial and banking service to rural areas inadequate supplied with such services.

The study has been fostering of community ownership and use of economic assets in rural development.

Despite that, the study to the economy at large has rapid, development of production activities in the rural areas and hence the improvement of the economic status of both the rural people and the rural areas; moreover, this will to some extent restrict the usual movement. I believe restrict will lead to promotion of emergence to the promotion of rural financial banking service and the promotion of emergence of an effective and integrate national financial system that responds to the need of the enteric economy.

The research work has made the inculcation of disciplined banking habit among the masses of low income earners in rural areas.

1.5 LIMITATION OF THE STUDY

The research has been carried out in order to analyze the role of community banks in rural development. By so doing, the researcher encountered some problems that limited her at knowledge to come out with a comprehensive report. Some of the limitations encountered include lack of money, time the factor, unavailability of need data.

Lack of availability of statistical data is one of the problem that faced the researcher, even wife the data is available. It sometime relate the data information.

The factor, the time been spend during the approval of the research topic and submission of the project writing is usually short in carrying out research work. Apart from that, the researcher have to travel to far distance to acquire knowledge or in search of the material but because of inadequate finance the researcher might not travel or carry out her research work.

Inspite of all the problems undergo by the researcher she still came up with organized study that will help to improve the habit of rural banking development.