Role Of Community Banking Development
(A Case Study Of Ogui Community Bank Enugu Nigeria)
Community banking development plays a crucial role in fostering economic resilience and local financial stability. These financial institutions, often rooted in smaller communities, serve as vital pillars supporting economic growth and inclusivity. By providing personalized services tailored to the unique needs of the local populace, community banks contribute to the financial well-being of individuals and small businesses. Their emphasis on relationship banking fosters a sense of trust and connection between customers and the bank. This localized approach is particularly significant in addressing the financial challenges faced by underserved or marginalized communities. Community banking development goes beyond mere financial transactions; it involves cultivating a symbiotic relationship with the community, stimulating entrepreneurship, and facilitating access to credit for small businesses. As these banks grow and adapt to technological advancements, they become pivotal players in the broader financial landscape, contributing to the overall economic health of the regions they serve.
Banking industry in Nigeria has come of age. It started in 1894 by the statement of first bank of Nigeria. Since then the number of banks in Nigeria has been on the increase.
In 1993, the guest for indigenous banking started and later in the decade natwnal bank was registered the flood gate for banks was opened with the affairment of independence.
Merchant banks to off in 1964 with Nigeria industrial development bank. In 1992 to be precise. The government of babangida considered it necessary to license the community banks to help the retail banks penetrate into the interiors. Prior to than. It had not been possible for the banks to go to the interiors. This was a welcomed idea. My communities saw it as a challenge with the minimum capital base of N500,000 many communities can pull resource together and float one.
The functioning of these banks has not been two encouraging due to the prevailing structure of fraud in the banking industry in the country. This work, therefore seeks for ways Ogui community has aided community development in it operations and environs.
Title page
Approval page
Dedication
Acknowledgement
Abstract
CHAPTER ONE
1.0 Introduction
1.2 Background to the study
1.3 The objective the study
1.4 Limitation of study
1.5 Significance of study
CHAPTER TWO
2.0 Literature reviews
2.1 Brief history of Ogui community bank
2.2 Bank deposits
2.3 Credit guarantying
2.4 Expert Advice
2.5 Share investment
2.6 Social services
CHAPTER THREE
3.0 Research methodology and design
3.1 Areas of study
3.2 Population
3.3 Sample and sampling techniques
3.4 Instrument used
3.5 Validity
3.6 Method of data collection
3.7 Method of data Analysis
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 Summary & findings
CHAPTER FIVE
5.0 Conclusions
5.1 Implication of the results
5.2 Recommendations
5.3 Suggestions for further research
5.4 Limitation of the study
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Nigeria and indeed all developing nation are in dare need of any instrument of help to wriggle out of the quagmire of under development. The various concerns of respective regimes in these countries and primarily on the food, shelter, clothing and other essential needs that make life meaningful. These needs range from the lower centre of the three base food, shelter and clothing to the higher security and status.
The primary aim of any nation is to make her citizens comfortable in every ramification. This connotes development of all the sectors of the economy and comes only by the combined effort of government, firms and individuals. The government here could be central or federal state or regional and local or district. The firm include all the manufacturing concerns either individual or their group and government as well.
Before embarking on any project the resources have to be harnessed. These resources include the various income by these three sector –government, firm and individual where the resource cannot meet with the demand, external means have to come to play.
Government as a pioneering hand cannot meet these needs from some where as they run to hundreds of millions for small business that need few thousands to start, the bulk population do not have them and so should come from some where the government of various administrations have tried to make life as meaningful as possible by purporting to providing the essential amenities that are catalyst to development.
The generality of the people live in rural areas, and to provide these in rural area is a task they have set to achieve. The rural population and encouragement to se6t up the thieving ventures that can help them. This encouragement is in terms of finance or in fixed assets like financial house as banks.
Depending on the amount needed for the take off, there are places to go to. These includes the development banks for loans repayable at least ten years like the Nigeria bank for commerce and industry (NBCI). Nigeria industrial development bank (NIPB). And Nigeria Agricultural bank (NAB). Merchant banks are there as discount houses, aid of portfolio management and financier of foreign trade as equipment leasing commercial bank as retail bank only give loan at a maximum of three years. The collaterals need in any of those categories of banks are very for within the reach of ordinary citizen it then appears that only the rich enjoy those services.
1.2 STATEMENT OF THE PROBLEM
The problem of this study are:
1. How willing are managers of community banks ready to give loans without stringent collaterals.
2. How do community banks cope with low level income of their customers.
3. How could stark illiterate ones be encouraged to bank incomes.
4. What role do community banks play in the development of Nigeria.
5. In what aspect has Ogui community bank contributed in the development of Nigeria.
1.3 OBJECTIVES OF THE STUDY
1. To the objective of this study to highlight various ways the community banks can help the rural dwellers either by way of loan or by expert advice.
2. To the rural dwellers will through the rural banking of this nature develop banking habit.
3. Most rural dwellers are not aware of the various types of fixed assets used in starting efficient business.
4. To the rural dweller have landed properties, but few other financial assets, it is the purpose of this study to do-emphasize the tendency to collect collaterals outside land. This will encourage them invest loans useful as they regard load highly and so would not like to lose it.
5. To the objective of this study to emphasize the need for increased investment to be lightened while we discourage the normal tenderly to hold cash, that is liquidity preference.
6. To the objective of this study is to find out the role the community banks play in the development of rural Nigeria.
1.4 LIMITATION OF THE STUDY
The researcher have limited herself to the operation of community bank as it effects the rural dwellers in trying to develops the economy. The researcher is aware of the numerous financial institutions littered in the country but the research have pinned her study down to community bank operations with Ogui Urban community bank as a focal point.
1.5 SIGNIFICANCE OF THE STUDY
1. The national board for community banks could use the findings of this study to plan for concern tech. efforts to improve the costs of operations of community banks in general.
2. It will be significant to government in revamping economy using the strategies marshaled therein.
3. The local people looking for more information on community banks could consume this work.
4. Interacted the public hoping to know more of community banks and their operation could lay hold on this episode.
SHARE PROJECT MATERIALS ON:
Role Of Community Banking Development:
Community banking development plays a crucial role in supporting local economies and fostering financial inclusion. These smaller, locally-focused banks have several important functions and benefits within a community:
- Local Economic Development: Community banks often have a deep understanding of the local economic landscape. They can provide loans and financial services to small businesses, startups, and individuals who might otherwise struggle to secure funding. This can help stimulate economic growth and create jobs within the community.
- Financial Inclusion: Community banks are often more willing to work with individuals who may not meet the strict criteria of larger, national banks. They can provide financial services to underserved populations, including low-income individuals, immigrants, and others who might be excluded from the traditional banking system.
- Relationship Banking: Community banks tend to build strong, personal relationships with their customers. This can lead to a higher level of trust and customer loyalty. These relationships can also allow community banks to provide tailored financial solutions that meet the specific needs of their customers.
- Local Investments: Community banks often reinvest a significant portion of their deposits in the local community. This can include financing local infrastructure projects, supporting local charities and nonprofits, and contributing to the overall well-being of the community.
- Risk Mitigation: Smaller, community-focused banks can be more conservative in their lending practices and risk management. This can help stabilize the local economy by avoiding risky financial behavior that could lead to financial crises.
- Local Decision-Making: Community banks make lending and investment decisions locally. This means that these decisions are often based on a deep understanding of the community’s needs and potential risks. It also means that decisions can be made more quickly, which can be crucial for businesses and individuals in need of timely financial support.
- Support for Agriculture: In rural areas, community banks often play a vital role in financing agricultural operations. They provide loans to farmers and ranchers, helping to ensure a stable food supply and supporting the agricultural industry, which is often a cornerstone of many rural communities.
- Competition and Consumer Choice: Community banks provide consumers and businesses with alternatives to larger, national banks. This competition can lead to better interest rates, lower fees, and improved customer service options for the community.
- Crisis Response: During times of economic crisis or disaster, community banks can be more agile in providing support to affected individuals and businesses. Their local focus allows them to respond quickly to urgent needs.
In summary, community banking development is essential for fostering economic growth, financial inclusion, and stability at the local level. These banks are deeply embedded in their communities and play a unique and valuable role in supporting the financial needs of individuals, businesses, and local organizations.