AN APPRAISAL OF COMMUNITY BANKING IN THE DEVELOPMENT OF RURAL ECONOMY

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AN APPRAISAL OF COMMUNITY BANKING IN THE DEVELOPMENT OF RURAL ECONOMY

CHAPTER ONE

INTRODUCTION

1.1            BACKGROUND TO THE STUDY

The rural areas, almost 75% of Nigerians contribute substantially about 92% of the nations agricultural products, knowing well of this visible and immeasurable contribution, the rural dwellers who are predominantly farmers are denied of any government support in terms of increased institutionalization of agricultural credit, concessionary interest rate policy, flexible condition on borrowing incentive to farmers, decentralization of institutional agencies, improved credit system, great reliability in supply of agricultural credit, negative action against defaulting credit institution.

From the above, this research will be carried out under an investigative analysis on what reform the federal government is enunciating the community banking programmes in the rural community which will be followed by an identification of all allied strategies and their relevance to the revamping of the dwindled rural economy in the face of the deregulation of the Nigerian economy. It is necessary to study how the non institutional financial sector complements the current development strategies. This study also intend to evaluate the challenges inherent in the operations of the community banking.    

1.2            STATEMENT OF PROBLEMS

Despite the recognition given to grass root operators by the government through the establishment of the community banking programmes it appears that such gestures is yet to be accepted by the rural operators. And on the other hand, informal financial sector has not received any support even when it clamors for such obviously because of the emergence of the problems ridden development strategies or programmes. Some people have jointly expressed their view over the government reckless neglect of the informal financial institution. The institutions are consistently starved of funds and it limits the scale of economic activities. It can support and it is equally believed that inadequate liquidity and difficulty in identifying the structure of interest rates are some of the problems facing the institution.

Gain (1991) holds that the establishment of development programmes aimed at rejuvenating from it limbo, the rural sectors by the stampeded Babangida’s administration is nothing but a ruse to hood work and mislead the innocent, the aggrieved and the oppressed. According to Solarin, community banking is a window dressing that lack substance. The he seriously believed that the programmes were more conceptual expression existing only in the contemplation of government imagination.  

1.3            PURPOSE OF STUDY

Among the objectives of this study are:

a.                 To appraise the community baking in the development of rural economy in Auchi community bank.

b.                 To suggest ways of improving on community banking in the study area.

c.                  To find out if the financial need of the rural operations are adequately catered for.

d.                 To know how the record priorities in terms of investment activities.  

1.4            SIGNIFICANCE OF THE STUDY

This study will be of importance to the community banks because it will enable community banks to adjust their credit delivery system to match the environment situation and circumstance of the rural operations. The study will be useful to government and the credit seekers because it will enable government to create a new orientation and initiate measures to sanities the operations of the existing programmes and then express credit seeker to many source of short term fiancés.  Finally the study will help future researchers as in areas of seeking information.

1.5            RESEARCH QUESTIONS

This study will be guided by the following:

a.                 What are the services your bank provides for Auchi area?

b.                 What are the problems of community rural banking in the area?

c.                  How does your bank facile these problems?  

1.6            SCOPE OF STUDY

The study was the appraisal of community banking in the development of rural economy: a case study of Auchi community bank, Auchi. The study among other things covers the antecedent to community banking, nature and characteristics of the informal savings pattern. The study also covers the expected roles of community banks to rural development, the emerging peculiarities and the complementary of community banks with informal units.

1.7            DEFINITION OF TERMS 

Bank: It is an organization offering financial services, especially the safe keeping of money.

Banking: Banking is the business of accepting deposits and lending money to customers. It is a trade like other business concerns because it has customers which are transacts business.

Community: A community “sentiment area” with emphasis upon affective interrelationship or it is a group of any size whose member’s ahs a consciousness of living a common life and sharing common destiny.

Development: Development can be seen as a change from one state to another to the extent that the new state is different from the formal in terms of developing.

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