research work is intended to do analysis of rural banking habits f the rural
communities of the Nigeria and to analyze the various problems militating
against the successful implementation of the rural banking awareness from the
central bank annual report and statement of account 1999. Survey
conducted it was revealed that the country is under banked.
In this work, some plausible recommendations that will assist the monetary
authorities in fashionry out practicable and attractive incentives for the
banking ensuring the achievement of the objectives of the programmed will be
The third chapter of this shows the research design and methodology.
The chapter four of this talks about the summary of findings of this topics
Finally, chapter five comprises of conclusion and recommendation of this topic
and the bibliography. I hope that this project will be of benefit to the
problems of banking habits of the rural communities in Nigeria.
1.2 Incentives use for the programme
1.3 Their statement of the problem
1.4 Objectives of the study
1.5 Significance of the study
1.6 Scope of and Limitation
1.7 Definition of Terms.
2.1 The need for community banking
3.1 Source of data collection
3.2 Secondary method of data collection
3.3 Location of data
3.4 Method of data analysis.
Since July 1997 which marked the official beginning of the rural banking
programme for commercial banks, the economy of Nigeria has gone, through
several changes each government continued policies it considered relevant banks
have in recent times been confronted with challenges and they have called for
introduction of one reform or directives so as to put it with our present
economic realities. This role is about what should be the proper function
of banks in the transformation of Nigeria alien economy. It is n this
regard that the rural banking programe of commercial banks came as measure that
will ensure effective grass root mobilization this resulted in settling up the
Okigbo financial system review committee in 1976. This most important
recommendations of the committee excepted by government include:
1) That banks should actively facilitate the
transformation of the rural environment by promoting the rapid expansion of
banking habits by the rural communities or committees. They will provide
saving deposit facilities for their customers and there by help to mobilize
rural funds outside the banking system. This served as a revenue for
creation of credit in rural areas which will be in the form of equity and loan
for small scale farmers, co-operative societies and entrepreneurs.
2) That bank lending policy in the past been in favour
of short term lending, that they should allow the medium and long tern lending
so as to give the long time instrument enough time to mature.
3) That banks should identify with national
objectives. They maintained that decision making of banking should be
4) That banks should be base a significant portion
of their profit to improve the quality they offer.
The most striking of these recommendation was on the view
that rural banking programme of commercial bank should be
established and that banks should allocate specific loan port-folio to their
rural bank customers.
The rural banking programme of commercial bank was introduced with objectives
1) The development of banking habits among rural
2) To curb the excesses in crude banking practice
such practice expose money to termites and render central bank monetary policy
3) To provide an institutional agency to mobilize
4) To improve agricultural production and the
growth of allied industries by extending necessary credit to those sectors
whose sources of credit to emanates from the local money lenders.
5) Diversification of rural economy in particular
and the National economy in general.
6) Others include the pegging the rural-urban
migration with the hope of reducing urban unemployment.
USE FOR THE PROGRAMME.
To ensure its smooth take off some incentive were outlined to
innovated banks. The incentives are:
a) Waving the requirement for feasibility report as
a pure requisite for the establishment of a rural branch.
b) Allowing the banks the monopoly of providing
banking services in their allocated centres for a period of two years starting
from the day of opening.
c) Allowing banks to write-off the capital cost of
erecting office banks and staff quarters with in a period of three years.
d) Exclusion of loans and advanced granted during
the first two years to existence in the complication of:-
(i) Growth rates of loan and advances.
(ii) Ration of adjusted capital to loans and advances.
Infacts, as at 1989 monetary policy guideline the rural banks
were recruited to grant a minimum of 45% deposited taken from
rural centres as loan to such centres. The first community was
established in 1989 by Ibrahim Babangida.
The essence of this study is to identify such key variable both endogenous and
exogenous that affects that effective development of banking habit in
Nigeria. The basic problem is inadequacy of infrastructural facilities in
the rural communities.
Savings and investment moves in the same direction current investment is a
function of accumulated savings rather, the death or our low level of economic
activities have drastically reduced the propensity to save. The poor
rural farmer considers satisfaction of the basic biological (needs as important
priority). This low level of income has reduced the deposits available to
the rural banks and subsequent liberation of credit to genuine small-scale
The competitive rule of the non-institutional credit scheme –
local money lenders have continued to attract many farmers.
The rural dwellers feel highly dissatisfied with the performance of the banks
in terms of giving loans. Thus, they resorted to patronizing these
grasping money lender. To challenge the activities of these local money
lenders, banks have to develop appropriate strategies so to enhance the banking
habits of the rural dwellers.
Banking in rural communities is facing the problem of skilled and courageous
personnel. Infact, banking in Nigeria is fastly becoming dynamic and
competitive. The banking need to have a change of orientation towards
their rural customers to survive highly sophistical financial environment, bank
should aim at understanding like needs (buying habits) or their customers.
Management should develop a philosophy of marketing concepts as to make its
operation customer oriented. The attitude of staff will pay a great role
in enhancing the banking habits of the rural people only if they adopt a new
approach in tackling the problem of the rural customers.
It is an obvious fact that rural communities illiteracy rate is considerably
high. There is a lack of practical knowledgement of modern in our banks.
The rural dwellers are not well enlightened as to the usefulness of banking as
obtained in advanced perpetuation of the under developed state of the rural
areas that make up Nigeria.
Incessant quarreling amongst communities have creasingly contributed in
polarizing the sitting of these banks. The problem of location has caused
many rich customers to be disenchanted and this decided to changed to other
banks of their choice. To ensure the realization of developing rural
banking habits, location of any bank should give preference to economic
variable like lavational convenience before political consideration.
OBJECTIVES OF THE STUDY
This stated the purpose of this is to
1. Identify the effect of level of income on the
customers support of a bank by the rural communities.
2. Knowing the relationship between
development of banking habits and the vocational conveniences of such a bank
3. know the effect of the attitude of the banking
staff on the banking habits of the people.
4. Also, know the impact of the people banking
habits towards the development of the rural communities in Nigeria
1.5 SIGNIFICANCE OF THE STUDY
To the government and the central bank the study will furnish their with useful
recommendations on how best to improve on the community banking schemes, so as
to effectively enhance the banking habits of the rural communities.
Today’s environment is highly sophisticated and more conductive for efficient
financial intermediation opinions however differs with regards to survival
potentials of some of the new banks to cope with the relatively poor liquidity
syndrome in our rural areas. The study will be an invaluable too towards
their survivals as recommendation will offered on the best strategies to adopt
for the dynamic and competitive financial market of the Nigeria Economy
visa-viz the rural economy.
In this section, the concepts which forms the cover of the
study are exhaustively explained. This will help in guiding
the thoughts and appreciation of the world wide evidence of the relevance of
developing an effective banking habits in the rural community has been defined
as or by the United Nations as a place with a population of less than 100,000
person and characterized by a highly integrate social interpersonal
relations and work habits. In Nigeria, the rural community is defined
as consisting of all economic activities outside the urban economy with
consisting of all economic activities outside the urban economy with
Agricultures as the predominant activity. In Nigeria, to guide commercial
of the banks in the choice of rural communities for effective development of
the rural bank programme to central bank of Nigeria arbitanly designed rural
1) Having local government headquarters and
considerably level of economic activities.
2) Having a population of 5000 or above and
established institution e.g schools.
institution mobilized savings from the surplus units to finance the investment
proposals of the deficit units therefore, occupy a unique positions for
facilitating and accelerating the pace of economic growth and
development. Their universally recognized function informed the rapidly
with which banks are deliberately encouraged established and regulate to ensure
stable and safe banking environment world-wide. As a result different
type of banks, therefore concentrated institution owned by a commodity for the
purpose of providing credit deposit.
BANKING HABITS: One of
the objectives of the programmed is the cultivation of banking habits amongst
rural dwellers. The banking habit refers to the practice of utilize
banking effectively. According to J. Orjih. Banking habits it is the
extent of willingness of the people in a given economy to make use of the
facilities and sense of banking.
TERMS AND CONDITIONS APPLY
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