ABSTRACT
Not, every Nigerian knew exactly the
paramount impact of Community Banks to our dear nation and to economic growth
and development of our father land Nigeria. Most of the time, it
sounds aloof and appears trivial to the ignorant and the unconcerned. We just
hear about this bank without really care how to set it up or even support it.
However,
Community Banks established in Nigeria
to help remedy the problem of lack of development that has been facing Nigeria since
after World war II in some areas of the country.
The
fundamental concepts of a Community bank is of
self-sustaining financial institution owned and managed by community or
a group of communities for the purpose of providing credit deposit, banking and
other financial services to its members, largely on the basis of their
self-recognition and credit worthiness.
This
research, work has five chapters. The first chapter of this document contains a
general discussion ie introduction of the topic of scrutinizes Community
Banking. It want further to state the background of the study, statement of
problems, objectives of the study, statement of hypothesis, scope and
limitations of the study, finally the definition of terms.
A
number of past related literature were vividly reviewed in chapter two for the
purpose of effective and comprehensive study in other words, highlighted the
objectives and functions of Community Banks vice-versa.
Chapter
three deals with the research design and methodology, method of research
design, sources of data, selection of population, sample and sampling
techniques. It also deals with method of data presentation and analysis.
The
data got from research survey were analyzed and interpreted in chapter four.
Finally,
the fifth chapter made by the researcher saw to the summary of findings,
recommendation and conclusion.
The
major findings of the study is that Ndiafia Community Banks been the case study
of this research work could be rited as fair and good as regards its roles in
her services and this is obviously manifested by their performance since the
bank was open.
TABLE OF CONTENT
Title page i
Approval page ii
Dedication iii
Abstract iv
Acknowledgement vi
Table of content ix
CHAPTER ONE
1.0 Introduction 1
1.1
Background
of the study 1
1.2
Statement
of the Problem 3
1.3
Purpose/objective
of the study 5
1.4
Research
Questions 6
1.5
Research
Hypothesis 7
1.6
Significance
of the study 9
1.7
Scope
and Limitation of the study 10
1.8
Definitions
of terms 11
Reference 12
CHAPTER TWO
2.0 Review
of Related Literature 13
2.1
Origin
of community Banks 13
2.2
Nature
and Scope of Community Banks 16
2.3
Concept
of Community Banks 18
2.4
Objectives
of Community Banks 20
2.5
Functions
of Community Banks 21
2.6
Ownership
Structure of Community Banks 22
2.7
Functions
of National Board for Community Banks 23
2.8
Central
Bank of Nigeria Control measures
to Community Banks 25
2.9
Community
Bank and the National financial institutions 26
2.10 Community Bank and Local Economic
Development 27
2.11 Problems confronting Community Banks 33
References 36
CHAPTER THREE
3.0 Research
Design and Methodology 38
3.1
Research
Design 38
3.2
Sources
of Data 38
3.3
Population 40
3.4
Sample
and sampling Techniques 40
3.5
Method
of Data Analysis 41
References 43
CHAPTER FOUR
Data presentation and Analysis
Interpretation 44
4.1
Analysis
by percentage Distribution 44
CHAPTER FIVE
Summary of Findings, Recommendation
and Conclusion 64
5.1
Findings 64
5.2
Recommendation 66
5.3
Conclusion 68
Bibliography 70
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In
Nigeria and in other developing countries alike the problem of credit extension
to the rural dwellers (who usually dominate the population) and cannot afford
the much sough collateral being demanded by conventional financial institutions
has been such a persistent Nigeria case, that government after government have
been making persistent efforts to remedy the situation. The financial needs of
these rural dwellers pose a double problem in that part from the risk inherent
in such credit in extension, it is not case effective because of the large
number of accounts involved with little amounts. Also the inability of those
group to have access to credits compounds the vicious circle of poverty in the
economic system (Ugwuoke K. 2000 p.21).
However,
the development of these rural areas where majority of the population dwell
happens to be bed rock of the economy. The establishment of Community Bank was
done in order to strengthen its programmes of grassroots economic development
(YOKUBU M.O. 2000 p. 36)
The
fundamental, concept in the establishment and operation of Community banking
system is that of a self sustaining financial institutions, owed and managed by
a community or a group of communities for the purposes of providing credit,
deposit, banking and other financial services within the area to its members
largely on the basis of their self recognition
and credit worthiness. It is in contradiction to the near total reliance
as the basis for giving credit, it was designed to ensure that bank Community
or group of communities may establish bank for the purposes of promoting rural
development improving the economic status of small-scale producers both in the
rural and urban area enhancing the rapid development of productive activities
especially in the rural areas to support desirable and sustainable rural
economic growth in the Nigeria Banks that are licensed under persons various
types of deposits including savings, time and target deposit issue for the
purpose of raising funds, redeemable debentures to interested parties.
In
the same vein the Community banking took off in 1990. when president on power (
C in C General Ibrahim Babangidi) in his annual budget speech announced that
the Community Banking system would be introduced into the Nigerian Financial
system. The Community bank implementation committee (CBIC) which established
for general supervisions, promotion, monitoring and development of the Community
Bank act under the control of (NBCB) National Board for Community Banks and
(CBN) Central Bank of Nigeria
(Ukamenam C. O. 2001 p. 9).
1.2 STATEMENT OF THE PROBLEM
a. The major problems which Community banks
faces is how harness those abundant resources for the development of the rural
areas, bearing in mind that those resources are minutely held by the vast
population of the rural dwellers.
b. The banking sector as the prime mover of
the nations economic life is seen as the most viable sector to make this dream
a this dream a reality, but then given the Nigerian situated especially (Enugu
Urban) with vast area of land and how income base, the task before community
banks are quite enormous with the problem of ignorance and illiteracy of the
majority of people whom the bank are dealing with and also the problem of
infrastructure facilities.
c. Another most delicate problem is that the
depositors in community banks do not have their deposits as is obtainable in
Commercial and Merchant Banks.
d. In addition, the current distress
syndrome have eaten deep into the confidence response on banks; the common
saying “you are working in a bank” in rural areas about higher spenders is no
longer in vogue. This is because villagers that regarded bank as a “cidatel of
money store” has discovered to chagrin that you can go to the store for your
money and come back empty handed and this confidence will take time and effort
to restore and community banks not equipped and in a position to restore this
confidence not now and also some of those distressed commercial banks.
e. Finally, lack of banking habit among the
rural dwellers who still use old tradition ways of savings mobilization like
the daily savings method or issued or the social meetings. How can the bank make
rural dwellers less apprehensive of the bank and use the services provided by
them to enhance their welfare.
1.3 PURPOSE/OBJECTIVE OF THE
STUDY
a. The objectives of this study is to
determine and analyse the promotion of rural development by providing financial
banking services (credit and deposit services) as well as other facilities to
communities adequately supplied with such facilities.
b. To determine and analyze its effects in
the natural economic development and asses how these developments created by
the Community Banks have gone in alleviating the rural economic development
problems.
c. The inculcation of disciplined banking
habits in the masses of low workers in Nigeria especially those in the
rural areas, it is believed that at the end of this study, rural economic
development would be identified and possible solution given.
d. The rapid enhancement of the development
productive activities in both rural and urban areas, and hence the improvement
of the economic status of small producers in the informal sectors of the
national economy.
e. Fostering of the spirit of community
ownership, and use of economic assets and maintenance of such facilities, and
organizations on a sustainable basis.
f. Promotion of the emergence of an
effective and integrated national financial system that responds to the need of
the whole economy especially at the grassroots community level.
1.4 RESEARCH QUESTIONS
The
study is to find out the problems associated with community banks investing
activities and their impact on the economy in rural area. As stated above, some
banks in Nigeria
is the scope of this research. Kindly respond objectively to the questionnaire
as all responses will be treated with strict confidence. It will be highly
appreciated if you could respond objectively to this statement without
prejudice.
Thanks
for your co-operation.
(i)
Do
you think that your bank can encourage rural dwellers to engage in investing
with bank that is closer to them?
(ii)
Can
you bank alleviate rural economic development in terms of infrastures in the
rural areas?
(iii)
Does
your liable of enormous problem of ignorance and illiteracy among the dwellers.
(iv)
Does
your community bank grant and encourage insurance/security to investors at a
normal level?
(v)
What
does your bank normally require collateral before granting loans to investors?
(vi)
Does
your bank provides expert financial advice to the management of funds by
beneficiaries?
1.5 RESEARCH HYPOTHESIS
The following hypothesis have been
designed for analysis:
Ho - That there is no significant
relationship between the
establishment of
Community Banks and growth of small scale industries.
H1 - That there is significant relationship
between the
establishment of
Community banks and growth of small scale industries
Ho - That the establishment of Community
banks in
Nigeria especially in Enugu urban has not led to increase awareness
and uses of banking services by the people.
H1 - That the establishment of Community
banks in
Nigeria especially in Enugu urban has led to increase awareness and
uses of banking services by the people.
Ho - That the level and amount of services
providing by
these banks in Enugu urban have not
justified the objectives of Community banking.
H1 - That the level and amount of services
providing by
these banks in Enugu urban have
justified the objectives of Community banking.
1.6 SIGNIFICANCE OF THE STUDY
This
research work will be a great help to the government especially the rural
development authority as it will give them the opportunity to access their
performance in rural economic development.
It
will also be of immense value of the community banks to access their
performance and improve in the area of poor performance.
Hence
it will be beneficial to the generality of the public and also of great
important to people carrying out research in related topic.
To
the economy at large, this study is of great value since the economic
development involves providing those amenities in the urban areas to the rural
areas. This will go some extent restrict the usual movement of the rural
dwellers to urban areas.
The
movement restriction will lead to massive agricultural and industrial
productions the promotion of emergence of an effective and integrated national
financial system that responds to the needs of the who economy.
1.7 SCOPE AND LIMITATIONS OF THE
STUDY
This
research work was chosen with the intention to analyze the role of community
banks in the economic growth and development of Nigeria.
In
conducting this research work, the researched, some problem so first was that
the researcher had to operate within the each of limited available financial
resources in the face of high cost of stationeries and transportation.
There
is also a problem of secretly in the nature of financial institutions in the
country’s this secretive act has resulted into unavailability of limited date
on this issue. The work has to be done within one academic year in addition to
the lectures which will be taken including our examinations.
These
limitation not with standing, the researcher still comes out with a well
articulated study which will add to the stock of solutions to the rural
economic development and national economy in general.
1.8 DEFINITIONS OF TERMS
Community Banks: A Community bank is a financial
institution established
to carter for the savings and credit needs of small-scale producers throughout
the country.
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