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.
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.
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.
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.
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.
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.
data got from research survey were analyzed and interpreted in chapter four.
the fifth chapter made by the researcher saw to the summary of findings,
recommendation and conclusion.
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
Table of content ix
1.0 Introduction 1
of the study 1
of the Problem 3
of the study 5
of the study 9
and Limitation of the study 10
of terms 11
of Related Literature 13
of community Banks 13
and Scope of Community Banks 16
of Community Banks 18
of Community Banks 20
of Community Banks 21
Structure of Community Banks 22
of National Board for Community Banks 23
Bank of Nigeria Control measures
to Community Banks 25
Bank and the National financial institutions 26
2.10 Community Bank and Local Economic
2.11 Problems confronting Community Banks 33
Design and Methodology 38
of Data 38
and sampling Techniques 40
of Data Analysis 41
Data presentation and Analysis
by percentage Distribution 44
Summary of Findings, Recommendation
and Conclusion 64
1.1 BACKGROUND OF THE STUDY
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).
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)
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.
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
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
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
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
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
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
for your co-operation.
you think that your bank can encourage rural dwellers to engage in investing
with bank that is closer to them?
you bank alleviate rural economic development in terms of infrastures in the
your liable of enormous problem of ignorance and illiteracy among the dwellers.
your community bank grant and encourage insurance/security to investors at a
does your bank normally require collateral before granting loans to investors?
your bank provides expert financial advice to the management of funds by
1.5 RESEARCH HYPOTHESIS
The following hypothesis have been
designed for analysis:
Ho - That there is no significant
relationship between the
Community Banks and growth of small scale industries.
H1 - That there is significant relationship
Community banks and growth of small scale industries
Ho - That the establishment of Community
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
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
these banks in Enugu urban have not
justified the objectives of Community banking.
H1 - That the level and amount of services
these banks in Enugu urban have
justified the objectives of Community banking.
1.6 SIGNIFICANCE OF THE STUDY
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.
will also be of immense value of the community banks to access their
performance and improve in the area of poor performance.
it will be beneficial to the generality of the public and also of great
important to people carrying out research in related topic.
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.
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
research work was chosen with the intention to analyze the role of community
banks in the economic growth and development of Nigeria.
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.
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.
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
to carter for the savings and credit needs of small-scale producers throughout
Ugwoke K. (2000), Banking Process
and Methods Hossanna
Publication Enugu p. 21
Ukemenem C.O. (2001), Practice of Banking
Yokubu M.O. (2000), The Nigeria
Financial System Macmillan
Publication, Otta Ogun State p. 36