An Appraisal of Community Banking in the Development of Rural Economy
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain the extent to which Awka community banks are providing for the credit needs of the rural masses and small-scale businesses.
- To find out How they are helping rural economic development efforts through their lending scheme or policy
- To ascertain the step which they are taking to assist their customer to become more credit worthy
- To ascertain the advantages of Awka community bank managers believe that community banks have over other community banks in terms of reaching the rural people with banking services
CHAPTER TWO
REVIEW OF RELATED LITERATURE
The Philosophy of Rural Banking
Rural Banking is a form of service designed to bring banking to the most remote and rural communities. Andah and Steel (2003), described them as “a unit bank owned by members of the rural community through purchase of shares and are licensed to provide financial intermediation in the rural areas”. The values of rural banking is on the mobilization of deposit and the provision of credit to farm and nonfarm activities to ensure the expansion of the rural communities in order to enhance Rural Development. This helps to promote savings culture and financial empowerment which gives the rural populace the ability to better their economic circumstances with their money in building a sustainable livelihood. According to Onugu (2000), the philosophy of rural banking is development oriented and seeks to;
- Inculcate disciplined banking habits in the rural population.
- Inspire the spirit of community ownership, organization and self-reliance.
- Generate credit from within the communities for enhancing the development of productive activities and improving the economic status of the communities and their individual members.
- Provide off-season bridging loans as a means of breaking the widespread dependence on local money-lenders.
- Formalize the use of communities as effective vehicles for rural change and national development.
- Promote rural activities such as agriculture, commerce, arts and crafts, agro- and mineral-based cottage and small-scale industries, vocational and trade skills, rural transportation e.t.c. particularly in support of small farmers, micro entrepreneurs, women, young people, and cooperatives.
- Promote the emergence of an effective and integrated financial system that responds to the needs of the whole economy from the grassroots to the national level to promote development. The philosophy of rural banking therefore makes the Rural Banks a 16 stakeholder in rural development programmes and an answer to the credit problems in the rural areas as is the case of India.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study an appraisal of community banking in the development of rural economy
Sources of data collection
Data were collected from two main sources namely:
Primary source and Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain an appraisal of community banking in the development of rural economy. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of community banking in the development of rural economy
Summary
This study was on an appraisal of community banking in the development of rural economy. Four objectives were raised which included: To ascertain the extent to which Awka community banks are providing for the credit needs of the rural masses and small-scale businesses, to find out How they are helping rural economic development efforts through their lending scheme or policy, to ascertain the step which they are taking to assist their customer to become more credit worthy and to ascertain the advantages of Awka community bank managers believe that community banks have over other community banks in terms of reaching the rural people with banking services. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staffs of Awka community bank. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made managers, banking officers, marketer and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The existence of community banks was a catalyst to the development of linkage banking. According to Seibel (1999), link-age banking emphasizes linkages between self-help groups and between savings and credit. Community banks represent a viable means of channeling credit into the rural sector based on a high standard of trust and credibility(The Punch, 2005). The recent policy reversal on the part of the Central Bank of Nigeria and government which removes community banks from the financial landscape in Nigeria is purely wrong and obviously a misadventure
Recommendation
It is a worthy attempt to create micro-finance institutions in Nigeria to complement the efforts of existing community banks. The government should as a matter of urgency allow community banks to continue to be rural financial institutions with specialized methods to serve broad segments of the rural population. Moreover, the National Board for Community Banks should be vested with the power to license, monitor and regulate community banks. The regulatory power of the Central Bank of Nigeria over community banks should not go beyond what is necessary for the performance of its monetary policy function. A partnership should be formed between the National Board for Community Banks, National Association of Community Banks and the Nigeria Agricultural, Cooperative and Rural Development Bank for the purpose of funding rural ventures through loan syndication. The Bankers’ Committee initiative for small and medium enterprises(SMEEIS) funding should be channeled through the Nigeria Agricultural, Cooperative and Rural Development Bank. The newly established Micro Finance Institutions should also be brought into partnerships with community banks for the purpose of financing rural projects and enterprises. As the major regulatory body for community banks, the NBCB should become my dynamic in training bank personnel and also providing avenues for banks to have access to technology. Community banks are too important because of their specialized skills in dealing with the rural people, to be sidetracked, in any attempt to alleviate poverty in the rural communities of Nigeria.
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