ROLE OF COMMUNITY BANK IN RURAL DEVELOPMENT OF NIGERIA
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ROLE OF COMMUNITY BANK IN RURAL DEVELOPMENT OF NIGERIA
CHAPTER ONE: THE ROLE OF THE Community BANK IN NIGERIA’S Rural DEVELOPMENT
1.0 INTRODUCTION
This chapter is mostly focused with efforts to
Increasing the rural economy’s economic basis, which has historically lagged due to a paucity of and limited access to loanable capital. In order to solve the problem, prior governments relied on development banking and rural branch banking of conventional banks in their economic strategies.
A self-sustaining financial institution owned by a community or collection of communities is known as community banking. Community banks, as opposed to commercial banks,
were formed primarily to stimulate economic activity in rural areas. They are specifically intended to support the directorate of food, roads, and rural infrastructure producers’ programmes.
A community bank has no other branches because it was founded to function solely within a community. It is commonly recognised that rural areas contain 75% of the country’s resources and ownership. As a result, until we focus on the rural areas, our development project and programme would be ineffective.
1.1 BACKGROUND TO THE STUDY
The federal government of Nigeria resolved in its 1990 budget statement to establish a community bank in order to bolster its grassroots economic development projects. A community bank is a self-sustaining financial institution that is owned and controlled by a community for the purpose of providing credit deposit, banking, and service to its members.
It is intended to ensure that a community may establish a community bank for the purpose of promoting Rural Development through the provision of finance and banking services, improving the economic status of small scale producers in both rural and urban areas,
and enhancing the rapid development of production activities in Nigeria, particularly in rural economic growth. A bank licenced under the community bank decree must take several sorts of deposits from individuals, including savings and time savings.
Receiving or collecting money on behalf of its customers; operating equipment leasing facilities aimed to assure its clients’ access to farm input.
The Nigerian financial system has had community banks since 1990, when the president of the Armed Forces, General Ibrahim Babangida, presented the budget speech.
1.3 STATEMENT OF THE PROBLEM
The following are included in the problem statement: –
1. How can loanable funds be made available to rural borrowers in order to boost their economic activities?
2. Other than asking for actual security such as collateral, how may the loan be secured?
3. How may rural banking habits be improved to help with rural development?
1.4 GOAL OF STUDY
The researcher’s investigations into the role of
The role of community banks in rural development reveals that the study’s objectives include the following: –
1. To ascertain how rural residents reacted to the services provided by community banks.
2. to identify the kind of customers who patronise community banks.
3. To determine the types of services provided by community banks to the general public.
4. Determine the extent to which lending to rural residents has an effect on the level of unemployment.
5. To determine any other non-banking services provided by community banks to the general public.
6. Determine whether the availability of the loan has reduced the level of rural-urban mobility.
1.5 THE SIGNIFICANCE OF THE STUDY
This research will be extremely beneficial to the
The government, particularly the rural development authority, will benefit from this since it will allow them to examine their effectiveness in rural development. It will also be extremely beneficial for community banks to assess their performance.
As a result, it will be useful to the entire population. It will also be critical for people to conduct research on relevant topics. The study attempts to meet the goal of encouraging rural development by offering financial and banking services, credit and deposit services, and other amenities.
It is also to achieve the establishment of the spirit of communal ownership and of economic assets, as well as their appropriate maintenance.
This study is extremely valuable to the economy as a whole since rural development entails bringing social amenities from the metropolitan area to the rural area.
This limits normal movement to some extent. Restriction will promote rural financial and banking services, as well as an integrated national financial system that meets the needs of the whole economy.
1.6 DEFINITION OF TERMS
For the purposes of this study, the concept of
Terms associated with the United Nations Standard Industrial Classification of Economic Activities.
1. Economic: Is the study of how a society organises its money in order to promote its nation.
2. Rural Areas: In small towns and villages that are not as large as cities.
3. Community: This refers to all of the people that live in a specific location.
4. Community bank: A self-sustaining financial institution owned by a community or group of communities.
5. Loanable funds: These are funds that an organisation, such as a bank, can lend out.
6. Funds: This is the amount of money that has been set aside or made accessible for a specific purpose.
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