2.1 Evolution and types
informal banking institution
2.2 Operation of informal banking.
2.3 The influence of informal banking in rural
2.4 Some shortcomings of informal banking
institution in rural communities.
2.5 Comparative analysis of formal& informal
2.6 Reasons for the continues existence and
propagation of informal banking habits.
2.7 Inaccessibility and inadequacy banking service
in rural areas.
3.0 Research design and
3.1 Research design
3.2 Data collection (secondary only)
1.0 BACKGROUND OF THE STUDY
The term banking embraces all the activities of a bank which
engages in any of the following functions such as receiving investing lending
exchanging serving of money and clams in other domestic and international
The tendency to act in a certain way o manner customary relating
to banking transaction is referred to as banking habits relative to this
definition one easily understand that what is being referred to as transaction
or informal banking institution because they perform the function of modern
banking institution though in an unrefined form.
A rural community is a conglomeration or amalgamation of serve
villages in this country majority of our people live in the rural communities.
Farming is the major activity and as such agriculture is their
main sources of income other rural activities are trading food processing
wearing tolls fabrication and poverty. These activities provide substantial
amount of income for the rural population. Establishment of institutional
infrastructure like banks in such areas will ought to cater for their financial
needs by mobilizing their resources into savings and extended credits for rural
dwellers there by fostering their productive capacity. But a great number
of rural dwellers do not use banking facilities for a number of reasons
including the existence of informal banking institution.
These informal banking institutions like their urban counter parts
engage to a large extent in financial interpretation some of the informal
institutions includes Age grade, Town union local money lenders family funds
and married women association. The peculiar reasons which endeared the rural
dwellers to informal banking institutions and ways of fostering enhancing and
indicating modern banking habits in our rural communities.
STATEMENT OF PROBLEM
After a careful analysis of answer form the respondents the
researcher discovered that the major problem militating against rural
communities are as follows:
- Lack of modern facilities like computer
- Lack of staff commitment
- Inadequate staff training for this purpose
- Unorganized internal structure of the bank
Another problem of banking in rural communities is absence of
adequate collateral security by borrower or customers collateral is some things
that the bank is willing to hold against the loan it gives to its
customers. The banking system has not been able to operate effectively
particularly in the area of economic development because of the inadequacy of
organized and developed stocks and securities markets like the stock exchange.
Also another problem of banking in Nigeria is the mass illiteracy
of the people particularly in the rural areas of the country. The
localization of most of our banks in the cities constitutes a problem of its
own because the illiterates in our rural areas will prefer to hoard or keep
their money in their houses than going to the bank to deposit them. just
for the obvious reason of not spending money in going to the bank to with draw
or deposit money for one may not like to spend N50 for transport in going to
the bank to withdraw or deposit N100.
1.2 OBJECTIVE OF THE STUDY
i. To foster the activities of banking especially
in the rural areas.
ii. To critically examine the operations of informal
banking institutions with the view to finding its short comings and influence
upon the rural dweller and also finding a possible solution to its short coming
iii. To identify the reasons responsible for the
continued existence of informal banking institutions.
iv. To also identify the reason why modern
people or dwellers.
v. Finally to make recommendations aimed at
fostering improving and enhancing services of informal banking in our rural
1.3 SIGNIFICANCE OF THE STUDY
This very research work will be of paramount important to rural
bankers in particularly and other interest group at large whether corporate or
i. The rural dweller makes greater use of the
service rendered by informal banking institutions.
ii. The informal banking institutions have survived
because of some unique services they render to the rural dwellers.
iii. The informal banking institution have existed
because of cultural elements in traditional society.
1.4 DEFINITION OF TERMS
Some of the words used are defined below:
- Banking: This
is the activities of the bank which engages the functions of receiving
investing lending exchanging servicing money and claims in domestic and
habits: This is
the tendency to act in a certain way or manner customary or relative to banking
- Rural community: Is
a conglomeration or amalgamation of serve villages. They can also be called
TERMS AND CONDITIONS APPLY
For more informations on project materials and more