STATISTICAL SURVEY ON THE EFFECTIVENESS OF COMMUNITY BANK OPERATIONS SERVICES IN RURAL AREA DEVELOPMENT [PDF]
in STATISTICS PROJECT TOPICS AND MATERIALS on August 9, 2020ABSTRACT
As community bank was introduce to promote development in rural areas by providing financial and banking services to them. The aim to carry out the study came from the failure of conventional banks (commercial and merchant bank) to open up branches in the rural area. The study therefore is to design a look into the effectiveness of community bank in a rural development, which was created to fill the gap caused by the reluctant of conventional bank to establish branches in the rural areas. This study recommended that government should try their possible best to provide more community banks and empower them with modern facilities, while the community bank should bring new ways or techniques for more effective and efficient services.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2 Statement of the problem
1.3 Research Questions
1.4 Research Hypothesis
1.5 Purpose of the study
1.6 Significant of the study
1.7 Scope of the study
1.8 Limitation of the study
1.9 Operational Definition of terms
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.2 Factors Inhibiting the Operations of community Banks
2.3 The Role of community Bank in Rural Development
CHAPTER THREE: RESEARCH METHOLOGY
3.1 Research Design
3.2 Population of the Study
3.3 Sample Size and Sampling Technique
3.4 Method of Data Collection
3.5 Research Instrument
3.6 Method of Data Analysis
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS.
4.1 Data Presentation
4.2 Data Analysis
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS.
5.1 Summary of finding
5.2 Conclusion
5.3 Recommendations
REFERENCES
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
In Nigeria today, there is a pronounced distinction between rural and urban standard of living. There are manifest disparities in population structures, employment opportunity outside the traditional sector and level of per capital income as well as in the overall living standard (Agbadudu, 2004).
The enhancement of rural development bank depends largely as the level of rural economic activities mindful of these facts, various programs lies at stimulating rural economy, which have been embarked upon by different Federal enterprises (Nwakwo, 2009).
Apart from the establishment of mass development banks, the Central Bank also made it mandatory for every commercial banks to set up branches in rural areas. Inspite of these measure nothing substantial has taken place in rural area due to complex banking regulations such as: quantitative receiving on banking credit selective central, discount rate etc. rural banking still depends on the old primitive method of banking.
The difference between microfinance bank and the commercial bank is more in the name of ownership, by the instrument establishing it, microfinance bank is owned by the community entirely, who have been however observed that if microfinance bank is well managed, it will help and encourage rural industrialization, it will also reduce rural urban drift and will help to increase the people per capital income and raise their standard of living.
Development and continuous development is goal which every nation aspires to achieve and when it is achieved every one shares in the glory. Most nation development tends to concentrate in the urban areas but a nation is related highly when its development extends to the rural areas. In Nigeria, people in the rural areas are predominantly peasant farmers who produced the highest percentage of nations food and yet there is no significant development of the rural areas. There are no good roads, electricity, and good water supply among things. The banking industries help in no small measure in brining development to any country therefore, in a bid to an extend this development to the rural areas.
The community banking system was introduced in Nigeria in 1990. The proper masses in the rural areas who are majority involved with agricultural production need finance and social amenities, which are supposed to make their work and life easier, therefore, there is need for more emphasis to be laid on establishment of community bank to see if those problems encountered in the rural areas could be solved and rural exodus brought to a standstill.
Adekanye (2004) in his book “Element of banking” stated that the idea of development bank was established to increase agricultural output and productivity. The improve efficiency in the use of scarce land and water resources to enhance more efficiency use of capital resources. Equitable distribution of income all of which gear up to raise the standard of living of the rural population.
The objectives of the community banking in rural areas are in a null-shell to facilitate the economics development of rural areas, which is the need for this study. Some Economist believe that the economic status of any nation depends to a large extend on how effective their banking industries are. It is in the view of this national reasoning that the then Babangida’s administration inaugurated the National Board For Community Bank in 1991, which its sole function is to guide and assist communities in establishing their own bank in their areas.
This measure is geared towards the use of banking industries in realization and actualization of the development of much neglected rural areas in the country. In rural areas most community banks find it difficult to survive due to a lots of factors. Most people in the rural areas are illiterates and fail to appreciate or acknowledge the importance of community bank.
They fail to see the community bank as a solution to most of their problems than rather they place it in the category of other banks, it is in view of those in the rural areas that the community banks do a lot more than they think, the important for better economic situation in the rural areas.
Community banking services in the rural areas are dynamic rural support system needed for an increase in the productivity of both large and small-scale farmer’s local businessmen, women and social amenities needs for better economic situation in rural areas (Nwakwo, 2009).
The possibility or an easy access to the services of community banks can be possible by any effective and well organized rural community banking policy. Rural and urban shifting could be discourage by encouraging mechanized farming in the rural areas which will hopefully lead to development of agro-based industries in the rural areas.
This will further create employment opportunities to the unemployed people in the rural areas and also motivate more people to appreciate setting up business in the rural areas. Community banking services has a big role to play in mobilizing and organizing rural dweller into efficient active co-operative group and is also capable of motivating the establishment of integrated rural communities by the active services.
1.2 Statement of the Problem
Rural development has always pose a problem to developing nations like Nigeria, it is a known fact that rural areas in Nigeria have been neglected and marginalized in terms infrastructural development, with all attention at the urban areas.
1.3 Research Questions
- Does community bank (microfinance bank) has significant positive effect on the rural area in Etsako West Local Government Area?
- Does community bank (microfinance bank) contribute to the development of the rural area in Etsako West Local Government Area?
iii. Is community bank encouraging small scale business in Etsako West Local Government Area?
- What are the challenges of community bank in Etsako West Local Government Area?
1.4 Research Hypothesis
From the research question, the following hypothesis were drawn
H0: Community bank (microfinance bank) has significant positive effect on the rural areas in Etsako West Local Government Area.
H1: Community bank (microfinance bank) do not have significant positive effect on the rural areas in Etsako West Local Government Area.
H0: Community bank (microfinance bank) contributed to the development of the rural area in Etsako West Local Government Area.
H1: Community bank (microfinance bank) do not contributed to the development of the rural area in Etsako West Local Government Area.
1.5 Purpose of the Study
The objective of this research work are stated as follows.
- The sole aim of setting up of community bank (microfinance bank) is to help facilitate economic development of rural areas.
- Providing loans and overdrafts as well as other credit facilities and services to individual or group of individual in a community.
iii. Encouraging savings habits among people in the area to make sure their money, which hitherto remain idle could be invested through saving for the development of the area.
- To ascertain how far the community bank (microfinance bank) has fulfilled the role of mobilization fund toward the development of the community.
- To know if the community bank (microfinance bank) have set up a higher target for growth of the community.
- To provide employment opportunity to the community.
1.6 Significant of the Study
The research may be of a great importance to the community bank (microfinance) banking works in Nigeria. The study is as much as it attempts to achieve the purpose of promoting the rural development by providing financial and banking services, credit and deposit services as well as other facilities. To the economy at large, this study is of a great value since rural development involves providing those social amenities in the urban area to the rural area, to some extent restrict the usual movement. Restriction will lead to the promotion of rural financial and banking services and integrated national financial system that responds to the need of the whole economy.
1.7 Scope of the Study
The study will be centered basically on the impact of community bank (microfinance bank) in the development of rural area Etsako West Local Government Area. In the course of analysis, attention will be focused on the effectiveness of Auchi microfinance bank, Auchi in the development of Auchi community.
1.8 Limitation of the Study
Indeed, we wish to place a record that some difficulties were encountered in the course of this research work.
- FINANCIAL CONSTRAINT: The distance was quite far due to having to visit the research case study area many times before finally been granted audience.
- TIME FACTOR: Time spent was more than expected due to having to wait to see the senior personnel officer in the bank and the community in general.
iii. RESOURCE MATERIAL: Some staffs and residents in the area refused to be interviewed while some gave only few reply to question asked it tool a serious compelling to get the questionnaire back.
- Some of the information greatly needed for this research work could not be found on the internet.
1.9 Operational Definition of Terms
- Community: A group of people of this same culture living together.
- Rural areas: Are areas are remote areas in a country that are under developed,
iii. Development: is a process of change in attitude, social structure and general acceleration of economic growth, through reduction of poverty and inequality
- Bank: A financial institution that is responsible of keeping of money and other valuables.
