Rural Banking Scheme, A Means Of Developing Banking Habits In Nigeria

Project and Seminar Topics with material for Banking and Finance

Rural Banking Scheme, A Means Of Developing Banking Habits In Nigeria


Abstract


This research is an investigation into the role of rural banking in developing banking habits in Nigeria. The study involves a survey of management and employees of Access Bank Limited and the inhabitants of “Itu”; a rural area in the Akwa Ibom state. Interviews and questionnaires were the main research techniques adopted for the data collected for this study.

Results show that, for the bank to be able to contribute effectively to economic development, further education of the rural folks must be undertaken so as to enlighten the people about the benefits that comes with banking. Until that is done, the banks´ impact on banking activities and habits in the area.


Chapter One


1.0 Introduction

1.1 Background of the Study

According to Adekanya F. (1984) Define Banking habit as the degree as which member of the public patronize banks. The regularity with which individual and corporate bodies in the society make use of banking faculties.

As palne (1978), Rural banking scheme is a programme managed by the central bank of Nigeria in the 1970 and it aims at bringing banking facilities to the door step of rural dwellers.

The first approach used by the commercial bank of Nigeria was mandating the commercial banks to open branches in the rural area, for example in 1977 the central bank of Nigeria mandated the commercial banks to open branches in the rural areas, for example to open 198 branches in the rural area within a period of three years July 1977 to June 1980 unfortunately the commercial banks of Nigeria guidelines.

To ensure compliance the central bank of Nigeria used the power it has under section 4 under the banking Act of 1969 tied the approval for the opening of urban branches but all to no avail.

Promulgated the microfinance Bank decree no 46 of 1992 which provide for the establishment of microfinance bank.
The microfinance banking system is owned and managed by community or a group of community for the purpose of providing deposit, credit and other banking facilities for the members of the community.

The number of microfinance banks has increased greatly from 1991 to date. By the nature, microfinance bank therefore are self sustaining financial institution owned and managed by the community or group of people for the purpose of providing credit facilities deposit banking and other financial services to its members at large on the basis of their self recreation and credit worthiness.

In Nigeria, like in many African countries successive government have implemented various agricultural and rural credit schemes as a means to address perceived shortage of rural credit to stimulate rural employment and productivity under the scheme institutional resources programme efforts and government energies were devoted, through parastatals based top button intervention interventions, to imperial mostly supply financial development funds to rural entrepreneur and small scale farmers ( Graham 1992, Yaron 1992).


1.2 Statement of the Problem

According to Adekanya F. (1984) Define Banking habit as the degree as which member of the public patronize banks. The regularity with which individual and corporate bodies in the society make use of banking faculties.

As palne (1978), Rural banking scheme is a programme managed by the central bank of Nigeria in the 1970 and it aims at bringing banking facilities to the door step of rural dwellers.

The first approach used by the commercial bank of Nigeria was mandating the commercial banks to open branches in the rural area, for example in 1977 the central bank of Nigeria mandated the commercial banks to open branches in the rural areas, for example to open 198 branches in the rural area within a period of three years July 1977 to June 1980 unfortunately the commercial banks of Nigeria guidelines.

To ensure compliance the central bank of Nigeria used the power it has under section 4 under the banking Act of 1969 tied the approval for the opening of urban branches but all to no avail.

Promulgated the microfinance Bank decree no 46 of 1992 which provide for the establishment of microfinance bank.
The microfinance banking system is owned and managed by community or a group of community for the purpose of providing deposit, credit and other banking facilities for the members of the community.

The number of microfinance banks has increased greatly from 1991 to date. By the nature, microfinance bank therefore are self-sustaining financial institution owned and managed by the community or group of people for the purpose of providing credit facilities deposit banking and other financial services to its members at large on the basis of their self-recreation and credit worthiness.

In Nigeria, like in many African countries successive government have implemented various agricultural and rural credit schemes as a means to address perceived shortage of rural credit to stimulate rural employment and productivity under the scheme institutional resources programme efforts and government energies were devoted, through parastatals based top button intervention interventions, to imperial mostly supply financial development funds to rural entrepreneur and small scale farmers ( Graham 1992, Yaron 1992).


1.2 Statement of the Problem

In Nigeria, economy has revealed that about 75% of the people living in rural areas has been deprived access to banking facilities Ijera M.O (1986).

And so far, in Nigeria, the problem of rural under development and hence general economic stagnation of the overall economics of the developing countries is inadequate flow of financial resources to the rural areas as well as the channeling of the available resources from the rural to the banking habit of the rural dwellers.

Mobilization and the utilization of owning financial resources are the most important pre conditions for the mordernizing the rural areas and improving the living standard of many.

Also, there is a total neglect of the rural community in the scheme of banking expansion and the inadequate of banking expansion and the inadequate of banking facilities generally. The government establishment of rural banking scheme of diffused branch network of bank to all in part of the country the develop banking habit among the people and could build up a banking system that could sustain rapid contribution and balanced development of the economy.

In Nigeria, the rural economy encompasses a substantial propotion of the countries human and natural resources and therefore require large amount of financial resources too in order to develop it.

Inspite of the effects with less than expected achievement, rural borrower still encounter difficulties in accessing credit from formal financial institution. It is thus necessary to provide a channel for mobilizing and investing saving in the rural area.

Therefore, it was due to the nature of banks in Nigeria economy as a whole coupled with the fact that the federal military government initiated the Rural Banking Programme (RBP) by her geographical size and population was under banked in term of banks and banking sector is the most backward in terms of proportion of the economic unit passing through the banking system (Stanstan 1994).


1.3 Aims of the Study

The overall aim of the study is to bring the people living in the rural areas closer to the rural banks.


1.4 Objectives of the Study

The general objective of the study is to identify the role of rural banking on developing banking habits in Nigeria.

Other specific Objectives include;

  1. To find out how the rural dwellers finance their projects.
  2. To find out if the rural banks develop banking habit among rural dwellers.
  3. To find out the tasks undertaken by rural banks in communities.

1.5 Research Questions

  1. How do the rural dwellers finance their projects?
  2. Do the rural banks develop banking habit among rural dwellers?
  3. What are the tasks undertaken by rural banks in communities?

1.6 Significance of the Study

It is the researcher’s fervent hope that this research work will be a useful tool in the hands of individuals, firms and the nation at large. Also, it is envisaged that the result of this study would help to create awareness of the functions of the rural banks in the rural areas to the people of Nigeria and the policy makers. This would enable the nation to adopt strategies which will help to achieve the objectives of the rural folks.

Finally, it will serve as a reference for students, teachers and other individuals to aid them in further research work.


1.7 Organisation of the Study

  1. Chapter one covers the introductory phase which focuses on the background of the study, problem statement, aims and objectives of the study, research hypothesis, limitation of the study and the scope of the study.
  2. Chapter two which is the literature review highlights the theoretical framework of the study and the relevant existing literature significant of the study and how the study was organised.
  3. The third chapter looks at the methodology adopted in acquiring data for the research. Under this is the description of the study area, sample size and sampling technique, methods of data collection, methods of data analysis and research strategy.
  4. Chapter four consists of data presentation, analysis, and discussion of the main findings.
  5. The final chapter presents the summary, recommendations and conclusions of the research work.

1.8 Limitation of the Study

There are a number of factors that boost economic development but this study is limited to the impact of rural banking on developing banking habits.

Time schedule:

The time limit for the research work may not be adequate for an effective, qualitative and quantitative work in relation to the researcher’s lecture hours. This may not enhance in-depth findings.

Availability of Information:

The organizations may not be willing to disclose some information because of secrecy, which could impede the data collection process needed by the researcher for a successful work.

Availability of Supervisor:

The supervisor has lecture hours, office hours and other relevant things to do in addition to research work supervision. It may be difficult to get the supervisor at the researcher’s convenience.

Financing the Project:

As researchers, financing a project may be very difficult to execute. It involves significant amounts of money to embark on a quality and sufficient work.


1.9 Scope of the Study

For the purpose of this study, the researcher will not research on all rural banks in the country, rather, on Access Bank Ltd in Itu L.G.A. Akwa Ibom state because it is nearer to the researcher.


Chapter Five


Summary of Findings Conclusion and Recommendations

5.1 Summary of Findings and Conclusion

From the presentation and analysis, it has been realised that out of a total of seventeen (17) questionnaires received from target population, fourteen (14) are males and three (3) are females. These indicate that males invest more in economic activities as compared to females.

However, out of the seventeen (17) questionnaires received from target population, five (5) out of the total number were from age group 20-30, ten (10) from age group 31-40 and two (2) from age group41-50.

Rural banks are established for a purpose, they have certain tasks to perform in the localities in which they have been established. Management responses include the following as tasks perfomed by the banks; Improve banking habits in the communities, accept deposits, grant farm loans, make payments and promote rural development and also indicate that farming, animal husbandry and fishing are types of economic activities that can bring about economic development in the rural areas and the country at large.

From the study it came to light that rural banks are established to support economic activities and improve banking habits among community dwellers which will lead to the development of the economy.

The total number of six (6) questionnaires received from management all gave a favourable response to the statement “Rural banking contributes to economic development” by choosing yes. This is to mean that rural banks impact on economic development. They are established to support economic activities which will also lead to the development of the economy.

Rural banks are financial institutions; and this statement came to light with majority of the respondents from the questionnaires issued acknowledging the fact that indeed the rural banks support their projects financially. In effect, the rural banks are the main source of financial assistance for the rural dwellers.


5.2 Recommendations

In analysing the data and findings for the research work, some problems were identified and as a result, recommendations have been provided below:

In order to influence the people in the rural areas to patronize the banks massively, management needs to educate the people more about the benefits associated with finance needed to accelerate their projects which can be made easily available by the banks. The education must be in the form of either door-to-door or local media on the ground and amongst the rural people. These will give the people a better understanding of why the banks were set up, and that, it was not meant for decorative purposes.

Management needs to conduct serious customer-care training seminars to their staff regarding good customer relations to enable customers be at ease while being handled in a tactful and diplomatic way any time they visit the banks. This somewhat will make the people feel and understand that the banks were established for them and their wellbeing.

The need for management to develop a mechanism which will influence a lot of females in partaking in economic activities. This will help better their lives, increase productivity in both the rural areas and the country atlarge.
Interactions with the rural dwellers enveloped issues like uncertainty and fear of contracting loans from the banks.

The popular saying is that the banks will take away all your properties in the long-run. In view of this, management can put in place more flexible terms of loan repayments some of which can take the form of daily collections and repayment through farm produce.

Finally, frequent awareness should be created to get the people well informed about the importance and/ or benefits of rural banking.


Get Complete Project Material

5,000 5000

The Complete Material Will Be Sent to You in Just 2 Steps

Quick & Simple…


Step One Purchase

Make Payment (Through Transfer) of ₦5,000 to the Account Below

Zenith BankAcc No: 1225513212
Samphina Academy
Current Account

Or CLICK HERE To Pay With Debit Card


FOR STUDENTS OUTSIDE NIGERIA
CLICK HERE To Purchase Material ($15)

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: Rural Banking Scheme, A Means Of Developing Banking Habits In Nigeria

The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply


  Contact Our Help Desk


Need a Different Topic? Perform a Quick Search



List of Related Works

Click on Any Topic to Preview the Content

samphina.academy

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.