Community Banks – Problems And Prospects In The Rural Development Of Nigeria

Community Banks – Problems And Prospects In Rural Development Of Nigeria: (A Case Study Of Ogui Community Bank, Enugu South L. G. A)

Community Banks – Problems And Prospects In Rural Development Of Nigeria: (A Case Study Of Ogui Community Bank, Enugu South L. G. A)

LITERATURE REVIEW

A description / review of literature with special reference to ogui-urban community bank of Nigeria ltd is very scanty. The book the community banking system in Nigeria an introduction was made successful by experts whose work experiences touched initially on the subject. These experts includes lawyers, community bank inspectors, free academics, a bank manager and a central bank of Nigerian examiner, other vital articles on community banking are found in magazines, journals and newspapers.

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

Ukemenam (1998) remarked that it was in the year 1892 that banking activities first started in Nigeria with the opening of a branch of the African banking corporation in Lagos .The bank was incorporated in Britain and owned by elder dumpster company, a shipping firm based in Liverpool. Their business then was the export to Europe of raw materials and cash crops. Two years later bank of British west African limited, (BBWA) now called first bank of Nigeria was established, other foreign banks were also established.

Continued and the researcher agreed with him that community bank is a commercial bank serving only one community and exploiting to the fullest its advantageous position of local knowledge and frost. Its survival is intimately connected with the development of the community which it serves by not getting involved in sophisticated bank services like foreign exchange transaction or international commercial papers, corporate finance or equipment leasing and by minimizing its operational cost through burgh localization and superior arrangements for loans recovery, it should be able to operate at lower interest rates to its customers. Each community bank, by serving its particular area, will also be contributing to the overall development of the banking system and of the economy and a whole. Above all, National network of such community bank will greatly strengthen the massive programmed of government in rural development

Sagbamah (1997) noted that the low volume of business in the rural areas where the vicious cycle of poverty tends to be prevalent, cannot guarantee sustainable business activities to encourage the establishment of conventional banks to provide banking services. The services of banks have multiplier effect on the society at large. That is why the failure of a bank in a community normally spells doom for that community. On the other hand, its success is easily reflected in the people. This station in most developing countries his led to the existence of financial dualism characterized by formal or institutionalized banking and financial system in the urban centers and informal financial markets in the rural areas.

Oji and Apayi (1981) stated that commercial banks have to decide on the proportion of deposit to be held in cash, profitability and solvency community banks are no exception since they have much of the characteristics of commercial banks. The rural dwellers have been identified as important resources for developing the rural communities, hence the problems of financial rural dwellers for effective development becomes an issue.

Akambi (1994) noted that to receive this issue a grassroots banking which would involve the rural dwellers themselves was necessary. In order to vigorously pursue the policy of rural development, the directorate for food, roads (rural infrastructure was established by degree No 4 of 1987. One of the primary tasks of the directorate was to identify, involve support viable local community Organizations in the effective mobilization of the rural population for sustained rural development activities, bearing on mind the need for promoting greater communities participation and economic self reliance in rural communities.

According to Ijere (1991) started that the needs necessitated that the establishment of the community bank implementation committee is fully completed in 1999 as a new board known as National board for community bank which were inaugurated to take over from the community bank implementation committee. This was as a result of increase in the numbers of the community bank and the increasing roll of these banks in rural development.

Community banks are widely regarded as micro-finance institution whose success is judged mainly by its accessibility and spread at the grass root level where its major clientele reside. Banking and financial experts as “The Modernization and supplication of an otherwise sophisticated banking system”. Consequently, by virtue of its community ownership, it serves the needs of the poor, small and medium client speeding and perhaps efficiently.

Empirical Review

Ogui community bank has come a long way to salvage the credit needs of rural dwellers, a means of facilitating programmers of directorate for foods, Roads and Rural infrastructures. In this connection, much achievement have been recorded in the area of rural development.

Iwuala-Osuoha (1995) remarked that Orodo community bank in Mbaitolu local Government area of Imo State granted a loan of #500,000 to the towns progressive Union for the purchase of 300KVA transformer. As a result of this of community now enjoys constant electric support and water.

This achievement is unique in the sense that efforts have several years been made to secure the loan with commercial bank in the area, but to no avail. Also records shows that Ayete community bank granted N500,000 loans and advances to over 17 customers ranging from N2000 to 20,000. the beneficiaries include farmers, traders, artisans, foods sellers, meat sellers to promote their business. Community banks have been embarking on financing various development project in rural areas whose areas they are located.

Riverline community banks, in Rivers State introduced Unemployment benefit scheme for the up-keep of men and women up to and above 70 years of age. The bank is also involved in various development projects such as property development, agriculture and installation of pipe borne water. This is the bank in action development of social sector, while the community banks are involved in financing development project in the places of operation, they are also contributing to the improvement of the banking Industry.

Community bank news letter of march 1993 note various developmental achievements of community bank for instance, it remarked that Amurie, Omanze community bank in Imo state financed the establishment of a saw mill industry at an estimated cost of #40,000.

The bank also financed poultry, palm and kernel project in the community and this explains the grassroot development role of the community bank.

Indeed the role of community banks should be viewed as complementary and supporting to the commercial banks. The community bank therefore serves as agency for bulking the savings of the lower income groups. Ogui Community bank has given much service to the Ogui Community and even beyond where it is located.

River community bank, in Rivers state introduced unemployment benefit scheme for the up keep of men and women up to and above no year of age. The bank is also involved in various development projects such as property development, agriculture and installation of pipe borne water. This is the bank in action in the development of social sector, while the community banks are involved in financing development projects in the places operating, they are also contributing to the improvement of the banking industry.

Community bank news letter of March 1993 note various development achievement of community bank., for instance, it remarked that Amurie, Omanze Community bank in Imo state financed the establishment of a saw mill industry at an estimated cost of N 40, 000.00.

The banks also finance poultry, palm and kernel project in the community banks should be viewed as complementary and supporting to the commercial banks. The community bank.

Indeed the role of community banks should be viewed as complementary and supporting to the commercial banks. The commercial bank therefore serve as agency for bulking. The savings of the lower income groups. Ohgui Community bank has given much services to the Ogui community and even beyond where it is located.

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 SUMMARY OF THE STUDY

Chapter one dealt with expressions of establishment of community bank in the rural development of Nigeria on case study of Ogui – Urban Enugu. Ogui Community bank came into being in July 1992 and it was situated at the heart of Ogui New layout. Problem identification were revealed, Significance of the study, definition of terms, the purpose of the study and the rationale of the study were also indicated.

In chapter two, the work of some writers and opinions of some authors cited during the research work were received such as definition of community bank and importance of community bank.

Chapter three reflects the areas covered in the course of the study, the method used in administering questionnaire instrument for data collection sample and sampling procedures and limitation of the study.

Finally, chapter four dealt with data presentation, analysis of data, testing of hypothesis and interpretation. The research will use questionnaire when analyzing the data and he will use Chi – Square (X2) in testing the hypothesis as it was appeared in chapter three.

5.2 CONCLUSION

Community bank represents a noble financial institutes in Nigeria whose focus of interest is with the grassroots, whether in the urban or rural areas.

This focus on the rural dwellers has become necessary because for the country to forge ahead economically, the rural dwellers are unable to provide the needed security to obtain loan. Even though the bank is confronted with so many problems, if adequate matching grants is provided by the government coupled with creating and enabling environment in the community through legislation.

In all of the above recommendations are implemented by both government and the banks, it is expected that the community will stand the beat of time and achieve the much desired grassroots savings mobilization and loan disbursement for rural development in Nigeria.

5.3 RECOMMENDATION

Based on the finding of study, the following recommendation are hereby preferred:

It is recommended that adequate and efficient personnel bee recruited to carryout the banking functions. This should be backed up with public enlightenment campaign to enlighten the rural dwellers on the mission of community bank

Community bank should endeavor to improve on the loan it gives out for prospects in the communities with insufficient fund.

The government should direct the Central Bank of Nigeria to take over the supervision of community bank as any other bank without further delay.

5.3 (b) RECOMMENDATION FOR FURTHER STUDIES

In review of the research conducted having obtained all the relevant information necessary for the topic the problems and prospects of community bank in the rural development of Nigeria, A case study of Ogui Community Bank, it was discovered that community bank contravened the banking guidelines issued by the CBN under several headings:

– I suggest that further investigation should be carried out on the problems of community bank in the rural development of Nigeria.

– I also suggest that an indepth study be made on the reasons why community banks contravene the guidelines issued by CBN.

Community Banks – Problems And Prospects In Rural Development Of Nigeria: (A Case Study Of Ogui Community Bank, Enugu South L. G. A)

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

Speak Your Mind

*