THE ROLE OF COMMUNITY BANKS IN RURAL DEVELOPMENT

ABSTRACT

Community banks were  established in Nigeria to help remedy the rural development problem that has been facing Nigeria since after world war II.

          The fundamental concepts of a community  bank is of a selt sustaining financial  institution, owned  and managed community or group of communities for the purpose of community of group of communities for the purpose of providing credit deposit, banking and other financial services to it  members largely on the basis of their self recognition and  credit worthiness.

(1)         The major finding of this study shows that community banks bring banking services to the community where commercial banks does not exist.

(2)         Community bank greatest customers are the  low income workers.

(3)         That bank also offer other non-banking services notable  mass transit transport services on a subsidized rate.

(4)         The greatest problem facing community bank is lack of adequate finance.

TABLE OF CONTENT

Title Page                                                                     II                

Approval Page                                                             III

Dedication                                                                              IV

Acknowledgement                                                      V

Abstract                                                                        VII

Table of Content                                                                   VIII

CHAPTER ONE

INTRODUCTION                                                         1

1.1       General Introduction                                          1

1.2       Background of the study                                   1

1.3       Statement of the Problem                                 3

1.4       Objective of the study                                                 3

1.5       Significance of the study                                  4

1.6       Limitation of the study                                                 6

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1       Introduction                                                         8

2.2       Rural banking scheme in Nigeria                     12

2.3       Nature and concept of community banks       12

2.4       Venture bank control measure to community banks 17

2.5       Functions of community banks are folding     20

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1       Research design                                               25

3.2       Area of study                                                      25

3.3       Source of study                                                  26

3.4       Method of data presentation                                      26

3.5       Method  of data analysis                                   27

Reference                                                                              28

CHAPTER FOUR

4.1       Summary of findings                                         29

CHAPTER FIVE

5.1       Recommendation                                              32

5.2       Conclusion                                                         33

Bibliography.                                                                35

CHAPTER ONE

INTRODUCTION

          This introduction is many concerned with the effort of community banks in rural development which is backwards due to certain problems that hinder them, such as infrastructural facilities, shortage of manpower, problem of security and so on.

1.1    BACKGROUND OF THE STUDY

          The evolution of community banks in Nigeria can be traced to the 1990 budget when the president formally announced the introduction of the programme. It was men for recognition of  the peculiarities of the rural communities and the need to monetize and integrate the rural economics into the banking system.

          Meanwhile the word community bank, it can be seen as a self sustaining financial  institution owned and managed as a community of group  of communities for the purpose of crewing deposit, providing credit  facilities and other banking a financial services to its members largely on the basis of their self recognition and credit worthness.

          Despite that, in July 1990, the  community banks implementation committee (CBIC) was set to work out the modalities  for the establishment of community banks.  Having produced all the necessary documents for the establishment of community banks, the CBIC commissioned a number of  community banks to operate before the setting up and inauguration of National Board for Community Banks (NBCB) on July 16, 1991.  The NBCB  with more executive powers and the responsibility for the overall supervision of community banks, placed the CBIC.  The first community bank commenced operation in December, 1990.

          A bank  licenced under community bank decree shall accept deposit of all type from people including savings and time savings.  To receive or  collect money on behalf of  customers.  Providing banking services to people as in giving out loans and after financial facilities.

1.2    STATEMENT OF THE PROBLEM

          The  statement of the problem were stated as follows.

1.           How  loan can be made available to rural drivellers or borrowers?

2.           how can rural banking system be improved to help in rural development?

3.           how to foster community ownership and use of economic assets?

4.           how can loan secured other then asking for tangible security like collateral ?

1.3    OBJECTIVE OF THE STUDY

          The objectives makes the researcher to know the role of community banks in rural development.  It reveals the following objectives.

1.           The promotion of rural development by providing financial and banking services to communities inadequately supplied with such services.