IMPACT OF COMPUTERIZATION IN MICROFINANCE BANK
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IMPACT OF COMPUTERIZATION IN MICROFINANCE BANK
ABSTRACT
The purpose of the study is to determine the impact of microfinance bank computerisation in Nsukka urban. A cross-sectional survey research design was adopted. The study’s population included eighty (80) participants. Five research questions were posed to help guide the investigation.
The data gathering instrument was a structured questionnaire validated by lecturers, while statistical means were utilised for data analysis. The study’s findings revealed that computerisation has a significant impact on microfinance banks
aids in bank documentation, improves customer loan interaction, aids in credit preparation and processing, and makes work more reliable, reduces the keeping of bulky documents in the bank, aids in safer information storage, and aids in reducing the workload of staff in checking balances. Finally, it improves the pace of the financial system.
Chapter one
Background to the Study
Microfinance banks have had an impact on Nsukka urban by employing computers to prepare various sorts of accounts, process customer statements of account, transfer money, and provide cash dispensing services. Before the introduction of computers into the financial sector, banking transactions were done manually. Microfinance banking presently practices this method.
According to Akukwe (2003), bank cheques began using the magnetic in character recognition (M.T.C.R) technology in the 1950s. Microfinance banking is still used in banks today. However, the most recent computer technology in the banking business is found in the use of automated teller machines (A.T.M.) and electronic fund transfer (E.F.T) systems.
Payroll checks are easily transferred to your account by electronic money transfer, and your regular monthly payments are automatically made on your behalf.
Again, funds can be simply transferred from your savings to reimburse the cheques you issued to individuals or organisations in relation to the purchases you made or the donations you announced.
An ATM is a specialised computer terminal that is situated inside and outside banks, supermarkets, shopping plazas, and hotels to allow for quick and easy deposits and withdrawals of monies. Customers utilise this arrangement to move funds across accounts without having to go to the bank.
According to Robinson (2001), microfinance banks offer credit and savings to individuals and groups in developing countries, including those who farm, fish, herd, operate small businesses, work for wages or commissions, rent out small amounts of land, vehicles, draft animals, machinery, and tools. Ndiaye (2005) believes that access to
In most developed countries, the history of microfinance banks has yet to be written. In many nations, it will be impossible to do so due to a lack of written documentation. This makes it difficult to expand on the existing, primarily informal, microfinance foundations and benefit from previous experiences.
For example, Nigeria is the only African country south of the Sahara where microfinance can be traced back at least 500 years, primarily through rotating savings and credit associations. They are known as “Esusu” among the Yoruba in Nigeria. Many West African countries now use the name lingua France.
Respondents claim that their close relatives are easier to recruit into group-based associations than persons from other ethnic groupings. This supports Zellers et al’s (2001) result that roughly half of the group members are linked to one another.
Because point liability and group cohesion were used as collateral for group members to secure microcredit from microfinance NGOs, known information about potential members was given significant weight (Zellers et al, 2001).
The gender distribution of respondents showed that there were more females (57%) than males (43%), which supports the findings of UNCDF (1997) and Adebayo (1997).
According to Olomola (2001) and Adyeye (2003), members of microfinance NGOs are largely women, who, along with children, are the most vulnerable to poverty; therefore, NGO microfinance delivery in the area is a true poverty reduction endeavour.
C.F Strickland (1934), a British cooperative expert, investigated the Esusu as a potential model for modern cooperative societies in western Nigeria. He thought that the Esusu was brought from India, having previously worked there and encountered rotating funds.
Which he regarded a higher culture at some unknown time and concluded that in this case, it was better to import cooperatives from England rather than modernising the Esusu/Strickland co-operative society’s ordinance, which was created in 1935 and modelled after British colonies in Africa.
Only in eastern Nigeria could financial cooperatives thrive, thanks to educated cooperative officers who urged them to build on the widely used Esusu.
The Igbo version of the Esusu included a legal and supervisory structure. Isusu, Adashi, Bam, and whatever other names ROSCAS go by in 350 ethnic groups whose origins have not been misinterpreted.
Statement of the Problem
Customers have recently reported little or no satisfaction with microfinance bank services. According to Akwkwe (2003), before the development of the computer, accountants spent many hours performing tedious calculations and recalculations.
Today, the electronic spread sheet page takes the place of the proper, pencil, and calculator for the accountant. The electronic formulation; the computer now enables the accountant to compute the whole accounting work, such as payroll income and expense records, with simplicity.
However, the usage of computers in microfinance banks in Nsukka urban has yet to be modernised for the advantage of the Nsukka residents.
The purpose of the study
The primary goal of this study is to determine the impact of computers on microfinance banks in Nsukka urban.
1. Determine how far the manual performance of microfinance banking has progressed.
2. Determine the impact of computerisation in a microfinance bank in Nsukka.
3. Determine other ways to improve banking processes through the use of computers.
4. Determine the microfinance bank’s readiness and financial resources for computerisation.
5. Computerisation and information technology benefits.
Significance of the Study
The researchers want to develop computerised banking procedures that will benefit both microfinance institutions and customers.
Furthermore, it is optimistic that after studying, the gained understanding of computer, internet, and information technology for carrying out their services will be replaced by fast and easy technology, making their services more effective.
As a result of this, microfinance banks will draw large deposits as they compete with other commercial banks.
Scope of the Study
This study is intended to cover all microfinance banks in the Nsukka urban zone. However, it is impossible to reach and gather information from every location.
As a result, this study is conducted using a case study of a microfinance bank in the Nsukka metropolitan zone.
Research Question: How has computerisation improved microfinance banks’ services?
2. What are the effects of computerisation in Nsukka city?
3. What other ways might computers be used to improve services at microfinance banks in Nsukka urban?
4. How ready is the Nsukka urban microfinance bank for computerisation?
5. How has computerisation helped microfinance banks improve their financial services?
Definition of Terms:
1. Science is a system of organised knowledge concerning a certain subject, particularly one dealing with aspects of human behaviour and society.
2. Computer: an electronic computer capable of scoring, organising, and retrieving information, as well as performing calculations and controlling other machines.
3. Machine: a device meant to make the performance of a specific task easier.
4. Computerisation: is the process of implementing computers in industry.
5. Computerised: means to use a computer to do a task.
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