COMMUNITY BANKING SYSTEM IN NIGERIA AND THE PROMOTION OF RURAL DEVELOPMENT
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COMMUNITY BANKING SYSTEM IN NIGERIA AND THE PROMOTION OF RURAL DEVELOPMENT
ABSTRACT OF THE NIGERIA COMMUNITY BANKING SYSTEM AND THE PROMOTION OF RURAL DEVELOPMENT
This topic (Community banking system and their promotional development) is very significant to our current economic situation if individuals mix with the project’s results and discoveries.
Community banking is a self-sustaining bank owned and controlled by communities that provides credit, deposit banking, and other financial services to people of the grass roots.
The goal of this project is to learn about community banking and its role in community development.
To collect data for the study, instruments such as oral interviews, questionnaires, and personal observations will be employed.
If only the findings, conclusions, and recommendations were implemented, it would boost bankers’ morale in promoting rural development and help people realise the efforts and influence of community banks in their respective areas.
1.01 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The foundation of this project effort is the identification of the functions of community banking systems in the promotion of rural development in Nigeria.
The community banking system was started on December 31, 1990, with the launching of Alheri Community Bank Kaduna by the then president. Within three years, community banks had commended operating nation wide.
There are now over 1000 Community banks operating across the country. Apart from assisting in the incorporation and licencing of the banks, as well as training their staff, the government has primarily given them with matching loans to help them through the early teething period.
The community bank is the most recent addition to the banking industry. The plan to establish a community bank was announced by then-President Ibrahim Babangida in his 1990 budget statement. However, the programme began in December 1990,
when the first licenced community bank opened its doors in Alhen, Local Government Area of Kaduna State. To expedite the initiative, a presidency committee known as the “Community Banks Implementation Committee” was formed. This was eventually superseded by the National Community Bank Board, which is presided over by the president.
The board is legally backed by the community bank decree of 1992 and is tasked with supervising and regulating community banks.
As a result of the board’s effectiveness, community banks were fashioned to become very deposit banking and financial services to its grass roots level.
1.2 STATEMENT OF THE PROBLEM
The problem of instilling a banking habit in rural communities. For example, palm wine tapers who know nothing about banking and make a lot of money from daily states of their product either keep the proceeds at home or among the raffia’s where they tap,
which becomes a problem, and the federal government decided to establish community banks to source these collie funds in the rural community.
Loan recovery has become an issue due to a lack of collateral securities and a high rate of default resulting from willful refusal to pay back loan since community banks are a grass roots banking system aimed at instilling banking habits in rural people. The community bank places less emphasis on collateral for loan execution.
1.3 AIMS AND OBJECTIVE OF THE STUDY
To learn about the many financial services provided by community banks, as well as their role in rural development.
To determine how effective they are in achieving the community banks’ goal of providing operational development to the rural populace through recommendations.
1.4 SIGNIFICANCE OF THE STUDY
The importance of the research is based on the fact that the establishment of community banks is a step in the right direction towards economic growth and an improved standard of living in both urban and rural communities.
Furthermore, the project will make it simple for the government, community bank administrators, and their clients to think about the best approach to operate or manage community banks in the country.
Furthermore, implementing the project’s findings and recommendations will significantly improve community banks’ development operations towards rural dwellers, as well as raise public trust in them.
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