This research work examined the “Effect of Bank distress on the
saving habit of the rural dwellers” it investigated the causes and
characteristic of bank distress in the Nigerian economy.
Many related literature were reviewed as the researchers collected
data for this work. In remote communities where banking habit was poorly
developed the exercise of changing bank notes in 1984 forced people to travel
scores of mills to change their money and also made them realize that they need
banks around incessant call for extension of bank branches to their areas. The
effect of bank distress on the economy on the other hand included the erosion
of public confidence mostly to the rural dwellers in putting their money in the
1.1 Background of study
1.2 Statement of problems
1.3 Purpose of study
1.4 Research question
1.5 Significance of the study
1.6 Delimitation scope and limitation
1.7 Definition of terms
2.0 Review of related literature
2.1 Meaning and characteristic
2.2 Cause of bank distress in
2.3 Factors hindering smooth saving habits of the
3.0 Research designs and
3.1 Sources of data
3.2 Location of data
3.3 Method of investigation
3.0 Summary and finding
References and bibliography
BACKGROUND OF STUDY
A bank can be defined as an organization whose principal operation are
concerned with the accumulation of temporarily idle money of the general public
from the purpose of advancing to others for expenditures.
John page defined a bank “A corporation or person(s) who accept money on
current account, pays cheques on such account on demand and collects cheque for
Oxfords advanced learners Dictionary define a bank as an
organization or a place that provides a financial services or a place where
something is stored ready for use.
The establishment of modern banking in Nigeria dates back to the
colonial when the African Banking corporation was formed in 1892 to distribute
currency notes of Bank of England for the British Treasury subsequent
developments were encouraged by colonial trade. In the bid to address the
credit needs of indigenous enterprises, Nigerian late ventured into the banking
business, initially through private individual initiatives and later through
deliberate government policy.
The problem of distress in the financial sector, including
outright bank failure, has been observed in Nigeria as back as 1930 when the
first bank failure was reported indeed, between 1930 and 1958 when the central
bank of Nigeria (CBN) was establishment over 21 bank failure were recorded.
However, the degree of intensity and scope of the distress has
never been as serious as has been observed since June 1989 when government
directive to withdraw deposits of government and other public sector
institution from bank to the CBN exposed the weak financial condition of most
financial institution and the severity of problem has progressively here used.
The distressed condition has been traced to a wide range of
causes, some of which are listed on literature review. Eventually, when
distress came to into the scene, fears of loosing fund to the banks influenced
negatively, the banking habit of the rural dwellers.
STATEMENT OF PROBLEMS
With the wave of distress spreading in the finance companies, community banks
and primary mortgage institutions, a total of 24 banks were distressed in 1933,
ad against 10 in 1992, 31 finance house were in default of malures obligations
456 complaints against 156 finance companies for non resumption of matured
funds, however, total assets and liabilities of 395 finance firms stood at
N13.38 billion in 1993 as against N2.44 billion reported for the proceeding
poor and detonating asset quality arising from large portfolio of
non-performing credits non-maintenance of assets and liability.
Poor management bothering on sharp practice and lack of experience which is the
most serious problem, associated with bank distress in the rural area.
Ineffective, inefficient and poor performance of the financial sector on the
role of promoting and supporting economic development in the rural areas.
The problem in focus above, triggered off the interest of the
researchers to carry out study in the area.
PURPOSE OF STUDY
Under the purpose of study, which
in other words, is the objectives of study the researcher will try to ascertain
1. What bank distress is all about
2. How it has affected the banking habit of the
3. The causes of bank distress.
4. To enlighten the rural dwellers on the need you
putting their money in banks.
5. To ascertain the percentage of commercial banks
is the rural areas.
6. To encourage and ensure effective rural savings.
1. What is bank
2. What are the
causes of bank distress
3. How does bank
distress affects the saving habit of the rural dwellers?
4. What can be
done to prevent bank distress?
5. How should
rural dwellers be enlightened on the need of putting money in bank.
SIGNIFICANCE OF STUDY
In discussing the effect of bank distress on the saving habit of the rural
dwellers the researcher have some important beneficiaries which include the
a. THE BANKING SECTION:- From the
work the management should know the damages, distress in causing the
conceptions of the bank dwellers towards savings in the bank. This will
make the management seat up an enunciate managerial policies that are capable
phasing out cases of distress in banks.
b. THE RURAL DWELLERS: Their benefit
is indirect, it doesn’t appeal to them directly since distress is the effects
on their saving habit.
Distress in bank will be eradicated to enable bank flourish well,
so it is that benefit (such as rehabilitating the management so as to restore
confidence and safely and area) that the banks get that will influence them
directly. They will see it themselves, people in the rural area will save their
money in banks and get them anytime they want. They will allay the fear in the
rural dweller and energies their spirit of putting their money in banks. This
is a result of powerful recommendations and suggestion made in this work.
c. ACADEMIC INSTITUTION:- This work
is relevant to the institution and the students in the field of management
sciences. Especially those in banking and finance in the sense that it will
improve their literate review purposes, some copies of this work will be kept
in the institution library for subsequent researchers for further research
d. THE GENERAL PUBLIC:- It is also
significant to everybody these include mostly the investors, pubic libraries
and research institution, where copies of this work will be kept and the
general public can go and get copies, read and now known what is going on at
the rural areas pertaining their banking habits.
e. INVESTOR: The study exonerates
fears the investors have from saving in the bank due for distress because the
investors would not like to dump the little they have with the bank.
f. PUBLIC LIBRARIES:- This work will
increase their stock of books for research purposes by researcher.
RESEARCH INSTITUTES:- It is significant to the researcher
institutes, because they keep those research work for further research by
study covers the effects of bank distress in the saving habit of the rural
DEFINITION OF TERMS
Stocks or bound pledged as security for repayment of a loan.
not doing guided by coincidence not held back from dong wrong.
Friendship is friendly relations between persons or countries.
intermediaries: Like finance companies primary mortgages institution etc who
serve as a go-between o. link in the financial institutions.
5. Malase: feeling
of badly discomfort, but without clear signs of a particular illness.
6. Parlance: use
or choice of words, ways of speaking.
7. Default: Fail
to p[perform a duty or to pay a debt.
8. Allay: make
something (e.g) pain, trouble, excitement fears less.
TERMS AND CONDITIONS APPLY
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