Impact Of Commercial Banks In Rural Development

INTRODUCTION
In this present world, all nation want its rural urban areas to be developed, with this perspective policies are being formulated to ensure its achievement of that country. For instance, in Nigeria a great number of people live in the rural areas and so the federal, sate and local government are very much concerned in the issue of developing these rural areas.
Development as it effects the rural people differs in many respects from those of the urban poor and poverty alleviation programm targeted at the rural poor must take into account those difference if the failure is to be substantially reduced.
Poverty and some economic deprivations characterize rural life. The people are peasant farmers who produce a high percentage of the nations crops and yet there is an significant development of these rural areas. Rural areas are characterized by bad roads, inadequate water supply, epileptic electricity supply, unequipped hospital among other things.
However, rural development has been given various interpretations by areas that belittled the colonial government. The colonial master jut made sure that there was easy exploration of the economy that is movement of natural resource from rural areas to cities and parts of Britain. With that they neglected the conditions of the rural areas. Since then effort have been made to correcct the situation.
The development of rural areas was interpreted to mean the development of agriculture. The belied. Was that since the main occupation of the rural people was in agriculture, to develop the rural areas means improving agricultural production. Seeing the importance of banking government in 1977, introduced the rural banking scheme to cultivate banking habit among rural dweller. The scheme was to mobilize savings from rural areas for the purpose of channeling same to profitable ventures and are credits by ways of equity and loan for small scale industries and to reduce the movement of young men and women from rural areas to urban areas.
After that, national development strategy with emphasis on the alleviation of rural problems and the enhancement of the quality of rural life. Thus the establishment of directorate of foods, road and rural infrastructures (DFRRI) in 1986.
Apart from facilities, banking services should be inculcated because some of the previous development banking policies failed to yield tangible result owning to many factors of which finance was the major one. The availability of finance resource in the right quantum and at the right time determines to a large extent the development or failure of the area. The commercial banks are in the position to do that.

1.2 STATEMENT OF PROBLEM
In an effort to check the problem associated the rural development, the federal government through the central bank of Nigeria (CBN) made it mandatory for commercial bank to open and operate branches office in rural areas.
Commercial banks are privately owned banks. The owner purposely establish them for profit making. Those commercial banks contributed to the development of rural areas especially union bank of Nigeria Plc. The amount of finance the banks give to rural areas are small and so their contribution towards the development of rural areas in minimal.
There are many reason that accounted for this the nature of commercial banks business. They are reluctant to lend to the rural dwellers who in most cases do not have the necessary collateral security that banks require before the rural people are not yet developed and they are not aware of the facilities that are available to them if they become customers of the banks i.e having deposits with the banks. They the re fore demand little or no finance from the commercial banks and make use of their personal savings for agriculture productivity which hinders high productivity.
The absence of insufficient number of co-operative societies in the rural area. Commercial banks because of poor credit worthiness of most rural banks because of most rural customers find it difficult to extend their loans on individual basis and therefore prefer to give it to club (farmer club) and co-operative units. The absence of those clubs and the attitudes exhibited by the rural dweller towards bank loans make it impossible for continued extension of credit.
The absence of infrastructural facilities in the rural areas make it repulsive for investors to invest in the areas.
Banks are looked upon as if they are responsible for the problem of rural development and so it is their duty to solved these problems for at least operating in these areas.

1.3 OBJECTIVE OF THE STUDY
The problems of rurally under development include massive drift of the youth to urban areas with the attendant unemployment and ant- social activities. The federal government has establish many development programmes which has been to monazite the rural areas and facilitates their rapid economic development hence the need for this study – The impact of commercial bank on rural development; A case study of union bank of Nigeria Plc. The objectives of this study includes: to know how banking facilities are extended to the rural areas using Emene as a case study.
To evaluate the roles commercials banks are expected to play in order to achieve the overall national objective of rural development of which they have been playing.
To find out the problem encountered in rural development by banks towards these innovations.

1.4 SIGNIFICANCE OF STUDY
Earlier so many things have been said and written about the impact of commercial banks in rural development which were being reconciled with the recommendation on the position the banks should be in rural development.
The research work will however, expose clearer the impact of commercial banks especially union bank of Nigeria Plc in rural development, the knowledge of the role that banks play in rural development will be known by the layman and actually what banks should focus their mind to. Again the students and the academic community undertaking a similar research programme on the impact of commercial banks in rural development will find this work useful as any reference made on this work will not be a wasted efforts.
A further research can be carried on this work as a continuous topic and more interesting discoveries can be made on how to improve life in the rural areas.

1.5 RESEARCH HYPOTHESIS
Here, research hypothesis entails testable, tentative and probable explanation of the relationship between two or more variable that create a state of affaire they include:
Ho – Commercial banks have played significant roles in rural development.
Hi – Commercial banks have not played any signif9icant role in rural development.
Ho – Government has contributed significantly in solving the problems of rural development.
Hi – Government has not contributed significantly in solving the problems of rural development .
Ho – Efficient and meaningful development can not thrive in the rural areas without commercial banks.
Hi – Efficient and meaning development can thrive in the rural areas without commercial banks.

1.6 research question
in order to ensure that through research is obtain question have to be formulated and tented
(1) What roles does the bank play in rural development?
(2) What are the benefit of rural development in Nigeria?
(3) Can effective and meaningful development thrive in the rural areas without commercial banks?
(4) What role has the government of Nigeria to play in the order to curb the problem faced by the rural development
(5) Can the problems of rural development in Nigeria be phased out

1.7 SCOPE AND LIMITATION OF STUDY
This research work covers in terms of scope a selected area in Enugu metropolis such as Emene rural area. This study will consider the impact of commercial banks in terms of agriculture development small scale enterprises boosting the banking habit of the rural dwellers the development of the areas through the commercial bank social responsibilities, taking into consideration the level of literacy and under development nature of rural areas.
The research work is limited because of time constraints, finance involved and sometimes non response from people interviewed.

1.8 DEFINITION TERMS
Rural areas: According to land act 1978, rural areas are areas or state not designated as urban areas by the government. It can be defined as an areas of land with population of less than equal to 50,000 persons with less appreciable level of economic activity and in frastructural development.
Urban areas: According to the land Act 1978, it is an areea of state designated as such by the government. It is defined as an area of land with population of more than 50,000 people with appreciable level of economic activity and frastructrual development. A place that is faily overcrowded with good standard of living. According to oxford dictionary, it is a direct change from a rural to an urban character.
Undeveloped land: This is a land where they exist no improvement in the nature of roads development services drainage, building structures or such improvement that will enhance the value of the land for industrial agricultural or residential purpose.
Development: It means advancing, progressing to a Higer economic state. It can be to move to a higher state in a positive way impressive manner.
Urban development- This is defined as the transformation of the urban areas of the state for the purpose of economic growth advancement by providing basic facilities.