CHAPTER ONE

INTRODUCTION

1.1             BACKGROUND OF STUDY

Community bank in a simple, term is a unit banking institution which is owned by people from the community or some group of individuals who contribute money as share holders to the bank thus sewing only the communities where they are situated.

The community bank implementation committee (CBIC) was inaugurated in September, 2010 by President Babangida with secretary to government of the federation AlhajiAligu Mohammed as the chairman.

The conditions set aside by the Babangida’s Regime restricts their primary services like.

Survival of the communities across the country was impossible, especially those located in the remotest areas because people were afraid to invest their hard earned money in a venture that mean a product of structural adjustment programme (SAP).

Community banks with some years in existence have recorded success because they are founded on the concept of community involvement and participation on it’s ownership and structure.

They succeeded in being flexible to give services to members who are in need rather than projects making. The community bank can open late and close late. It can open on Saturdays or market days to enable the rural dwellers that might be ignorant of other banking system contact them easily.

Furthermore, population of people in a community can pose serious danger in the development of community bank because the fewer the people in an area, the fewer market volume of the bank in that area. However, one of the major constraints in the survival of community bank is lack of proper awareness of what community banks stand for and it’s services in promoting business enterprises in rural environs.

The major purpose for introducing community banks it to assist in the development of Nigeria, starting from the grass roots (communities) especially in the rural areas, so the need for conditions restricting their primary services is uncalled for, rather should be allowed to meet the needs of the rural dwellers.

Bringing community bank to the door steps of the people, will vehemently bring the credit aiding activities like, Agricultural credit guarantee scheme, most of all the rural banking scheme since there are number of branches in the rural areas around the country in order to boost the quality of rural life.

1.2             STATEMENT OF THE PROBLEM

In this topic, “community banking and Economic development in Delta State”, the researcher would want to evaluate the complicating problems encountered by community banks in carrying out their daily programmes.

Since community banks are owned and financed by the community, they are not able to perform adequately as expected in terms of savings. Therefore a major problem is that of inadequate funds.

Other problem includes:

Migration of rural dwellers make it difficult on the community bank, leaving few people behind resulting to poor patronage because, the fewer the people in an area, the fewer the market volume of the bank in that area. Thus, the bank activities become increasingly reduced and resulting into low patronage.

Perhaps, the business investment in rural areas are very few except for farming and petty trading, which is predominantly the activities of rural dwellers. Their income is not enough for their family, how much more going to the bank to have savings Account and do other transactions.

Also the occupation of the dwellers in a community could extensively affect the stay or exit of the banking sectors sited in the community in question.

There is also the problem of improper planning and utilization of money.

Literacy among rural dwellers is also a problem as not much awareness has been created about community banks activities in the rural areas.

1.3             OBJECTIVE OF THE STUDY

The main objectives of this study is to serve as a reference guide to those that may want to write on this topic in subsequent times to know the impact and effect of community banks on rural dwellers and the country at large.

Also the relationship between the central bank and the community banks should not be left out including their achievements so far in their prospective years after they are established.

At the inception of community banks, central bank of Nigeria was authorized by the Regime of then (Babangida’s Administration) to grant approvals to the bodies seeking to operate community banking services. Therefore, the CBN has established the “National board for community banks as the body responsible for the supervision of the activities of community banks, ensuring the Banks comply with the laid down rules policies of C.B.N.

Community banks have created much profiting and yielding impacts on rural dwellers, like making the society and it’s environs worth living. Reducing extremely the rural – urban migration of the people resident in that particular site of the community banks.

Finally, their major role is to provide banking services in the rural area because it was obvious that before this time, conventional bank limited their locations and activities to cities, because of fear that rural dwellers knew nothing about banking and any attempt to extent its services to non-viable area will spell doom to their business. In summary, the community bank as helped bank has tremendously in rural regions. In this research work the researcher will examine the various ways community bank has contributed in the economic development of Agbor, Delta State.       

1.4     RESEARCH QUESTIONS

·        This particular section is usually a conjectural question that will help the researcher to understand the various ways to follow.

·        Some of the questions employed are. Does Community have a major role to play in the development of the economy?

·        Can security in community banks premises be accounted for?

·        Does Community bank implement their function to the best of their customer satisfaction?

·        Is community banking readily out for the customer service and public at large?

1.5             SIGNIFICANT OF THE STUDY

It is hope that the topic “community banking and economic development” in Delta State has great significant to the following set of people professions and economic activities. The operational guide lines of community is to include on itsself members of the community share holder in which the bank is situated, it will also generate credit for rural residents enhancing the development of productive activities.

This research work will encourage the rural populace toward the use of community bank as a means of savings in the development purpose.

The findings will enable the government and community in general to realize the effectiveness of community bank to achieve the desired goals. The communities therein, can account for the improvement in the quality of life by making the country a conducive place for inhabitation.

1.6             LIMITATIONS OF THE STUDY

This research work is limited to Agborka Community Bank Agbor, Delta State.

1.7             OPERATIONAL DEFINITION OF TERMS

Community bank has been defined as a unit banking institution where they are located. However, these terms used have unique meanings that could be subjected to different interpretations by different readers of this project, as can be defined below.

ECONOMIC GROWTH                 Is define as an increase in gross national product in real G.N.P or per capital.

ECONOMIC DEVELOPMENT     Means both more output and change in the technical and institutional arrangement by which it is produced and distributed.

RURAL                                            This is the characteristic of suitable for line in circulation in the country side.

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