EFFECT OF COMMUNITY BANKS IN RURAL DEVELOPMENT

This project work is a study of the impact of Community Banks in Rural Development: case study Uli Community Bank Ltd, Uli. In carrying out the research, questionnaires were used, which the researcher made available to the manager, staff, and customers of Uli Community Bank. Information for this research was collected from primary, secondary and oral interviews. The data were analyzed using tables and the evaluation of data using percentages. The study reveals Uli Community Bank has a lot of impact on the development of its local area (Uli, Ihiala LGA, Anambra State), and these include: inculcating banking habits on the rural dwellers, and to generate employment in the areas where it is located; and as well, granting loans to the rural dwellers; a ready medium for quick cash transfers for people whose relations are abroad and within. The researcher also found out that Uli Community Bank does not only provide financial services to the rural dwellers, but also guarantees employment to the masses in their local and granting loans to the rural dwellers without adhering strictly to the collateral requirements Uli Community Bank even goes the extent of limiting the use of collateral to only making use of a third party qyarabtir. The researcher also noticed that the main problem facing Uli Community Bank is that it has a lot to do with the growth of economic activities in rural areas. The recommendations were made the banks should be adequately funded by the federal government to beef up their capital base. Since it was established to promote productive activities in her rural area, this will go a long way in helping the bank to meet her enormous demands in the development of the rural areas. The government should also allow the community bank to be involved in foreign exchange transactions and also to process her cheques directly with the central bank and not through correspondent commercial banks. This could be possible only if the community bank is allowed to have branches and are accepted no clearing house. Finally, Uli Community Bank should be allowed to establish other branches in her rural areas and beyond. If all these recommendations are implemented, it will go a very long way to developing the rural community which is among the objectives for establishing community banks.