CHAPTER ONE
1.0
INTRODUCTION
This chapter is mainly concerned with
the efforts at
expanding the economic base of the
rural area which are always backwards because of scarcity of and restrictive
access to loanable funds. In solving the
problem, previous government in their economic policies have lied on
development banking and rural branch banking of orthodox banks. The word Community Banking is defined as a
self sustaining financial institution owned by a community or a group of
communities. Unlike commercial banks,
community banks were established mainly to promote productive activities in the
rural area. Specially, they are meant to
facilities the programmes of directorate of food, roads and rural
infrastructural producers.
Community
bank has no other branch because it is established to operate within a
community alone. It is well known that
75 percent of the country’s resource and ownment are in the rural areas. So our development project and programme can
not achieve any appreciable improvement until this is focus on those rural
areas.
1.1 BACKGROUND OF THE STUDY
The
federal government of Nigeria
1990 budget speech decided to establish community bank in order to strengthen
its programmes of grassroots economic development. The fundamental concept of a community banks
is of a self-sustaining financial institution, owned and managed by a community
for the purpose of providing credit deposit, banking and the service to its
members. It is designed to ensure that a
community may establish a community bank for the purpose fo promoting rural
development throughout the provision of finance and banking service improving
the economic status of small scale producers both in the rural and urban areas,
enhancing the rapid development of production activities especially in the
rural economic growth in Nigeria. A bank
licensed under the community bank decree shall accept from persons various
types of deposit including savings and time savings.
Receive or collect money on behalf of
its customers, operate equipment leasing facilities which is designed to ensure
access of its customer to farm input.
Community bank in Nigeria
banking system dates back to 1990 when the budget speech was delivered by the
president commander in Chief of the Armed Forces, General Ibrahim Babangida.
1.3
STATEMENT OF THE PROBLEM
The statement of the problem include
the following: -
1.
How
can loanable funds made accessible to rural borrowers to enhance their economic
activities?
2.
How
can the loan be secured other than asking for tangible security like
collateral?
3.
How
rural banking habit can be improved to assist I rural development?
1.4
OBJECTIVE OF THE STUDY
The studies conducted by the
researcher on the role of
community banks in rural development
reveals that the objective of the study includes the following: -
1.
To
determine how rural dwellers had responded to the services of community banks.
2.
to
identify the type of customer that patronize community banks.
3.
To
determine the type of services that are rendered to the public by the community
banks.
4.
To
ascertain the extent to which granting of loan to rural dwellers has any effect
on unemployment level.
5.
To
determine any other non-banking services that are rendered to the public by the
community banks.
6.
To
examine if the availability of the loan has reduced the level of rural urban
migration.
1.5
SIGNIFICANCE OF THE STUDY
This research work will be of immense
help to the
government especially the rural
development authority, as it will give them the opportunity to assess their
performance in rural development. It
will also be a great value to the community banks to assess their performance.
Hence,
it will be beneficial to the generality of the public. It will also be of a great importance to
people carryout research in related topic.
The study is as much as it attempt to achieve the purpose of promoting
the rural development by providing financial and banking services, credit and
deposit services as well as other facilities.
It is also to achieve the festering of the spirit of community ownership
and of economic assets and its maintenance on a suitable basis. To the economy at large, this study is of a
great value since rural development involves providing those social amenities
in the urban area to the rural area.
This to some extent restrict the usual movement. Restriction will lead to the promotion of
rural financial and banking services and integrated national financial system
that responds to the need of the whole economy.
1.6
LIMITATION OF STUDY
This research work was chosen with
the intention to analyze
the role of community banks in the
rural development. In the process of
carrying out the study. The researcher
encountered some problems which limited her ability to come out with a
comprehensive report.
Some of these limitations includes
time constraints, finance, and unavailability of the needed data.
The
time lag between the approval of the research topic and the submission was
virtually short to carryout a comprehensive research. Also due to the economic hardship in the
country, the researcher could not travel to far distance for collection of
data.
Lack
of availability of statistical data also posed its own problem. Even when the data are available, they are
sometimes related to out dated information.
This
limitation not withstanding, the researcher still came up with a well
articulated study that will add to the stock of solution to the rural
development.
1.7
DEFINITION OF TERMS
For the purpose of this research
work, the definition of
terms used with the UN Standard
Industrial classification of economic activities.
1.
Economic:
Is the study of how a society organizes its money, in order to encourage
its nation.
2.
Rural Areas:
In a little communities that is not as larging like the city
3.
Community: Is all the people living in a
particular area.
4.
Community Bank: Is a self sustaining financial
institution owned by a community or a group of community.
5.
Loanable: This is the money that can
organization such as a bank lend out money.
6.
Funds: Is the amount of money that has been
saved or that has been made available for a particular purpose.
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