The Appraisal Of Rural Banking Development In Nigeria (A Case Study Of Balogun Funlani Micro Finance Bank Ilorin Branch)
The Appraisal Of Rural Banking Development In Nigeria (A Case Study Of Balogun Funlani Micro Finance Bank Ilorin Branch)
Table of Content
- Title Page
- Certification
- Dedication
- Acknowledgement
- Table of contents
Chapter One
1.0 Introduction
- 1.1 Background to the Study
- 1.1 Statement of the Problem
- 1.2 Research Question
- 1.2 Objectives of the Study
- 1.3 Significance of the Study
- 1.4 Limitation of the Study
Chapter Two
2.0 Literature Review
- 2.1 Concept of Rural Banking
- 2.2 Key Role Of Rural Banking For Rural Dwellers
- 2.3 Federal Government Policy and Central Banking of Nigeria (C.B.N)
- 2.4 Achievement of the program
Chapter Three
3.0 Research Methodology
- 3.1 Historical Background of the Case Study
- 3.2 Method Of Data Collection
- 3.2 Population of the sample size
- 3.3 Sample Technique
Chapter Four
4.0 Data Presentation and Analysis
- 4.1 Preamble
- 4.2 Presentation of Data
- 4.3 Data Analysis
Chapter Five
5.0 Summary, Conclusion and Recommendations
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendations
- References
Chapter One
1.0 Introduction
1.1 Background to the Study
The traditional banking business is the holding of deposit and lending money. This role is developed from the fact that in any society it appears to exist too broad classes of people this surplus spending limit and deficit spending limit however; the following are some of the functions of commercial banks.
Intermediaries: the banks serves as intermediaries or middlemen between the people who saves there money in the bank and those who borrow the money from the banks.
Acceptance of deposit: this is undoubtedly the oldest function of the bank in the early stages of bank depositions usually paid a charge lost of keeping their income in the bank but as banking system modernized and well organized, banks realize the advantages that accrue to them through saving.
They promote saving investment the banks naturally pare the ways for this and investment debtors are by this means enticed to save more money since they are conscious of the additional money which the bank would give for any amount saved.
It serves as agent for payment by their policy commercial banks usually allows their customers to keep either current or saving accounts or both customers in this respect the most outstanding help is the lending of money to customers.
Another function is granting loan of loans when banks grant loans to their customer they normally credits the granted loans to the account of the borrowers.
Also the banks grants overdraft to their customers, they do this by allowing such customer to issue charges up to sum of the overdraft in additions to the original money which such customer has in the bank.
Finally, the bank do the bill of exchange and transaction of foreign exchange in the rural areas there is need for the establishment of banks deposit the effort made of the growth of bank in the rural areas since 1960 much integration in rural areas have met and establishment of bank have been centered in urban areas.
1.2 Statement of the Problems
The problem in this research work wants to deal with the hindrances encountered by the commercial banks on the process of their operation in rural areas. Some of these can be stated as follows:
- Lack of man power of commercial banks, poses a problem for them in their operation.
- Lack of cordial/ customer relationship in rural area due to numerous branches
- Illiteracy of customers in rural areas
- Inadequate security outfit in rural area to secure the bank premises
- Insufficient volume of business of the attitudes of farmers, hunters, and market sellers
- Problem of accommodation encountered by staffs
The problem therefore is how to resolve the profit motives of the rural commercial banks and the essential services being rendered to rural dwellers. This project work is designed to measure to what extent the rural commercial banks have been to involve the rural dwellers in the economic activities in terms of awareness.
The commercial banks are profit making organization. There is a greater fear in establishing in rural areas where it cannot maximize profit. Rural banking has being seen as indispensable if the nation is to develop its rural areas. The development of one rural area may not be a reality if services of commercial banks are not at the reach of rural dwellers.
1.3 Research Question
- What are the basic problems encountered by commercial banks in rural areas?
- What impact has the rural banking done on the rural dwellers?
- What are the problems of rural banking in rural area?
1.4 Objective of the Study
The objective of this study is to show reader the major problems encountered in rural banking system.
It also demonstrates the impact of rural banking on the agricultural production.
Furthermore, the objectives of this study is to point out user the justification of rural banking system in the rural areas with particular reference to the actives of the united bank for Africa balogun Fulani microfinance bank. Kwara state.
To make recommendation based on research finding on appraisal of rural banking development in Nigeria as a device for business growth and development.
1.5 Significant of the Study
The research work helped to expose the benefit of the rural banking development and also gave suggestion and information which can be used to improve the scheme they are as follows.
Improvement of the general standard of living of the rural areas economically and socially.
Promotion of credit facilities for the rural farmer to boast agricultural production, hence, self sufficiency will be achieved food production.
Production in the drift of young men and women from rural areas to the urban centre.
1.6 Limitation of the Study
When a research of this mature is being carried out there is bound to some anticipation constraints, this project is therefore not exception.
The study was feed with finance problem as well as problem of getting interviews conducted time factor is also another impediment to the study which eventually made the study to be limited to limited bank for Balogun Fulani microfinance branch alone.
In availability of enough text in the school library for the purpose of research made it difficult to gather secondary data reading gist available text books, encyclopedia newspaper, magazines, and soon.
1.7 Definition of Terms
1. Dwellers:
These are the people that reside in the community.
2. Foreign Exchange:
The stock of foreign currencies is including gold which are available to a country for its use in international transaction over a specified period at time.
3. Intermediaries:
The bank service as a middle man between the people who save their money in the bank and those borrow money from the banks.
4. Loan:
Thing that is lent, especially a sum of money.
5. Overdraft:
Amount of money by which a bank is overdrawn.
Chapter Five
5.0 Summary, Conclusion and Recommendations
5.1 Summary
Despite the fact that the project is set on the appraisal of rural banking development in Nigeria, the findings will be summarized in this chapter together with its conclusion and recommendation.
Through banks generally in Nigeria played relatively small role in the development of sectors compared to government industries and public institution and the fact the government introduced agriculture credit granted scheme which provides loan for plantain and agriculture. These are some farmers who still require bank assistance for their small scale farming.
The objective of commercial banking system backed the scheme that was established on July, 1977 after many years research and planning of the structure of the country.
The most significant step taken by the central bank of Nigeria in to bid to engender the spread of banking habit in the rural banking system programme.
The scheme under which commercial bank an directed to establish branches or offices in rural areas as run three face which expired by July, 31st 1989.
Based on the research work examined problem like lack of business ventures, current account customers were very few, lack of industry to service the bank, farmers have no collateral security secure loans from bank. These are the problem not in the source of implementing rural banking programme in adequate trained staff are said to be part of social problems faced in the rural banking development in Nigeria.
The achievement made so far by banks (co-operative and commercial banks), micro-finance particularly are introduce day to day business activities to the trader, scheme, establishment of training center and open F branches in rural land urban areas.
There is bright futures for rural banking in Nigeria the government can influence its policies on rural banking programme the more, provision of utilities like electricity, establishment of small scale enterprises and schools e.t.c educating the rural citizen to patronize banks that in turn raise employment opportunity for unemployed citizens.
5.2 Conclusion
For every measure, Nigeria grossly embarked upon his geographical size and population, the country is still under backed in terms of number of banks is still under officer per square kilometer as well as in the divisibility of banking branches per unit population.
The country is also under banked in terms of the population of the transaction F the economic unit passing through the banking system. This can be assessed by talking the deposits in the banking system as a proportion of the gross domestic produce i.e. total deposit (include saving and time deposits) calculated as a proportion of the gross domestic product of current prices presented same 20% in 1990 absent 20.2% in 1994 and 12.5% in 1997 (central bank of Nigeria report in 1980 December).
The pointed to a conclusion that the banking system has not yet holly penetrated in the country.
However, to the extent that bank have been compiled to open rural branches the central bank of Nigeria can be said to have succeeded in taking banking services to grass root.
This can only be said that it satisfied the statutory requirement since the banking can meet the rural needs of the rural communities as a whole.
Commercial banks together with co-operative banks can not only be solely upon to satisfy the entire credit need of rural communities as the liabilities of the rural dwellers, will only further the problem.
5.3 Recommendations
A part from agricultural sector development and the increased amount of credit it will need to gain accessibility and to utilized technology innovation the role of commercial banks is giving credit with likeness expand and the policy in measure need to be adopted to meet inevitable increase in the rural credit requirement.
The formation of co-operative group should be encouraged in the interest of credit agencies and rural borrower. As it is administratively easier and chapter for the bank to deal with large group borrower than individual smaller areas, similarly farmers too within a co-operative system able to put forward viable project that would acceptable to the banks.
The activities to the young agricultural graduate should be not be left out by re-organizing them to form an extension services scheme because they have acquire better framed in school and would than be able to translate and encourage the adoption of new technologies to higher productivities in the rural sectors.
In addition each commercial bank should be obliged to get up a credit division with qualified staff. Such personal will operate farmer’s loans, mobilization service to avoid bearing or misuse fund by the farmers. The personals shall be able to determined people’s genuine needs for credit or touring the rural areas.
Commercial bank can also be encouraged to invest in rural areas large scale farming agric business and community development project under favorable government tax rebate.
Moreover, the commercial institution (bank) should be encourage to assist in the diversifications and promotion of the rural economy by tending for retails trade, produce, marketing, grain skill, carpentry, tailoring and trade which by itself create more employment rural dwellers also all rural branches should provide full rage of banking services opening daily adequate insensitive from the government should be giving to commercial bank among which are easy communication, transportation, water supply, electricity, land and security.
State government should mount publicity campaign to enlighten rural communities about the services been provided by the rural banks.
In the task of bringing banking service to rural areas the various categories of the Nigeria financial system has an important role to play. The central bank of Nigeria must take initiative and assume enough power to get commercial bank to accept its directive. On their own point commercial bank make of existing organization in advance loans.
The cooperative and federal saving banks are well suited to serve rural areas too they should therefore restructure and supported accordingly local credit institution shall also suit to serve rural areas. It should be improved with government managerial and financial support as well as with legislation to stream line and systemize their activities and generate confidence in their operation.
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