ABSTRACT
The purpose of this
study is to examine the Urban Banking Scheme as a tool for economic development
with emphasis on the First Bank of Nigeria Plc, Benin City, Ring Road branch.
The over riding problem in Nigeria which affects the development of Urban
Banking is the developed and poorly adopted financial practices which prevail
in the country. The project takes a look at the content to which Urban Banks
have been able to meet the needs of the people through their policies in
financing projects. In chapter one, it looks at the historical background,
statement of problem, research questions, objectives of the study, the
significance of the study, scope of the study, limitation of the study and the
definition of terms. Chapter two, the researcher had to consult so many
literatures by several authors including articles published by many people. so
many references have to be made in the course of writing, before the literature
review was finally produced. In the third chapter, the methodology used in
collecting information was questionnaire and analysis was also done. In chapter
four, the presentation of data collected and findings of the investigations
carried out in the Bank and officials and customers to the Bank is shown. In
conclusion, which is chapter five of the project, policy recommendations and
conclusion were made.
TABLE OF CONTENT
CHAPTER ONE
Introduction
Background of the study
Historical background of
First Bank of Nigeria
Statement of problem
Research questions
Objective of the study
Significance of the
study
Scope of the study
Limitation of the study
Definition of terms
CHAPTER
TWO
Review of related
literature
CHAPTER THREE
Methodology
Introduction
Research design
Population
Sample and sampling
technique
Instrumentation
Validation
Method of data
collection
Data analysis
CHAPTER
FOUR
Data analysis and
interpretation
Findings
CHAPTER
FIVE
Summary, conclusion and
recommendations
REFERENCES
QUESTIONNAIRE
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
A long debated issue in banking theory is the
recognizing and degree of bank output. Although the strategic tool which banks
in monetary theory and in real world, there is little agreement on what it is
that banks produce and it is sometimes conflicting output measures service
researchers especially in estimating a banks’ production function (Benston 1982
and 1988). Banking is characterized by certain features, which set it apart
from other degree of bank output. Banking is a service industry, and it performs
many diverse roles which include: depositing, safe advice, performing trust
service, transferring and collecting funds etc. Modern commercial banking in
Nigeria date back to the early colonial period when the African Banking
Cooperation opened on office in Lagos way back in 1982. Being the oldest unit
of the Nigeria financial system, it has been one of the most advanced of the
financial institutions. The other financial communication (intermediaries) are
officially secret (restricted) both in their capital resources and in their
scope of activity, most of them are new developments.
This enable the commercial banks an edge over others, particularly the similar
institution, example are the federal saving Bank, Merchant banks and Mortgage
banks in collecting deposits and extending credit to the economy. The
activities of banking commenced in Nigeria in the year 1872 with the
establishment of the African Banking Cooperation which has the responsibility
of distributing banks of England note for the British Treasury. The bank of
British West Africa, which is now the First bank was set up in 1892. The
National Bank of Nigeria came into existence in 1983 as the First indigenous
Bank. From 1933 to 1945 numerous banks were established. According to Foluso
Olabisi in his book introduction to banking almost 150 banks were established.
Meanwhile, only the Continental Bank and the WEMA banks that struggle to
survive. Furthermore, within the period of 1950-51 which is normally referred
to as the period of the bank boom (sudden increase) in Nigeria. During these
times almost eighteen (18) banks were quickly established. By the end of 1954
all of them have gone into voluntary liquidation with any merchant Bank in
1960. Based on the lone performance of the indigenous banks, the government set
up G. P. patron commission to look in the failures of indigenous banks. The
reports of the commission goes to the setting up of the central bank of Nigeria
(CBN) in the year 1958.
Moreover, it is interesting to note that before decree (an official order)
establishing the central bank of Nigeria in 1958. Nigerians were becoming
increasingly skeptical (NAME) of the deliberate act of discrimination of
expatriate (a person who is not living in his country) banks against indigenous
borrowers and even competing unfairly with the narrow financial base on the
indigenous bank. The establishment of the central bank of Nigeria marked a
turning point in government effort to harness or achieve the activities of the
banks and completely change (revolutionized) them for the nation’s development.
The actual revolutions in banking commercial with the banking decree of 1969.
This was followed by the indigenization decree of the hands of Nigerians. The
climax of the revolution in banking came into existence in 1976 when the
federal government set up the Okigbo committee to review the financial system.
In 1977, the federal government accepted some of the official suggestion or
recommendations was the extension of banking services to urban areas. Before
the enactment (a law which has been made official) of programme in urban
sectors, the urban dwellers were in a total hardship in terms of exchange and
the promotion of their businesses. Some of these dwellers sometimes dug (dig)
up holes to hide their money or lend them out to people who might in turn fail
to pay back the money. As a result of the forgoing there was no; proper
redistribution or sharing of money and it also lacked effective circulation.
The urban banking scheme is also part of the government effort to assist the
agriculturists who mostly reside in the urban areas and also to discourage the
migration of workers moving from the urban areas to rural centres.
HISTORICAL BACKGROUND OF
FIRST BANK OF NIGERIA
The First Bank of Nigeria Plc for over a century
has distinguished itself as a leading banking institution and a major
contribution to the economic advancement and development of Nigeria. It was
founded in 1894 by a shipping magnate from Liverpool, Sir Alfred Jones, the
bank commenced as a small operation in the office of Elder Dempster and Company
in Lagos. It was incorporated as limited liability Company on March 31st,
1894 with head office in Liverpool. It started business under the corporate
name of the Bank for British West African (BBWA) with a paid up capital of 12,
000 pounds sterling after absorbing its predecessor (a thing such as a machine,
that has been followed or replaced by something else), the African Banking
Corporation, which was established earlier in 1892. This signated the
preeminent (important) position, which the bank was to set up in the years of
operations, the bank recorded an impressive growth and worked closely with the
colonial government in performing the traditional functions of a central bank,
such as issue of specie in West African sub region.
To justify its West African courage, a branch was opened in Accra, Gold Coast
(now Ghana) in 1896 and another in Freetown Sierra Leone in 1898. These marked
the genesis of banks international banking operations. The second branch of the
bank in Nigeria was opened in the old Calabar in 1890 and two years later,
services were extended to Northern Nigeria. With 339 branches spread throughout
the federation, the bank maintains the largest branch network in the industry
in Nigeria. To satisfy the needs of its customers, First bank has diversified
into a wide range of banking activities and services. These include corporate
and retail banking registraship, trusteeship and insurance brokerage. In addition
as part of its strategy of progressive internationalization (to bring something
under the control of protection of many nation) in November 2002, the bank
became the first financial institution in Nigeria to establish a subsidiary
(business company) bank in the United Kingdom.
In the 1957, it changed its name from bank British West Africa to Bank of West
Africa. In 1969, the bank was incorporated locally as standard bank of Nigeria
limited with the company decree of 1968. Changes in the name of the bank also
occurred in 1978 and 1991 to First Bank of Nigeria limited and first bank of
Nigeria Plc respectively in 1985, the bank introduced a decentralized structure
with time regional administrations. This was reconfigured (to make changes to the
ways that things are arranged to work) in 1992 to enhance the banks’
operational efficiency. In 1996 the bank introduced the FBN (First Bank of
Nigeria) century 11 project to revolutionalize its operations in line with the
dynamic of the environment.
STATEMENT OF PROBLEM
The major problem that affects the upliftment of
urban banking is merely the indigent poorly adopted financial practices which
prevail in the urban sectors. Most people have this questioning thought regards
the impacts of the urban banking scheme on the urban areas and its dwellers.
The researcher has a strong belief that bank are supposed to be one of the
institutions which government uses in facilitating the economic growth. One of
the best methods in reviewing the economy is by paying attention on the urban
areas in order to increase or promote agricultural activities which in future
will assist to raise standard of living. For this reason looking at the urban
communities they were being left to do their banking and credit in the
traditional way by using different methods including “AJO” (daily savings
collection), “Osusu” (money lenders) which has not been so easy to develop the
modern banking habit practices.
In addition, the absence or inadequacy of infrastructures (the basic system and
services that are necessary for country or an organization to run smoothly).
Institutional machinery for mobilizing saving for investment purpose has
hampered (prevent) the growth of urban sectors.
RESEARCH QUESTIONS
The following research
questions were formulated to guide the study.
Does the bank provide
job opportunities to the indigenes of Edo state?
How effective has the
contributions of banks affected the economy of individuals?
What are the problems
encountered by the banks in the performance of services to the urban dwellers?
To what extent have the
banks in this area influence the life style of the inhabitants?
Do the banking
activities progress in the urban sectors of Edo state?
Does the banking system
really bring development to the urban areas?
OBJECTIVE OF THE STUDY
The major purpose of this study is to look at
the economy and its progress in the urban areas of Edo state. In other words,
to know the extent in which the banks in this area have influenced the life
style of the inhabitants. The researcher work also geared (designed) or
organized) towards how banking service have helped in the development of
agricultural productivity because most of the urban inhabitants engaged in
agricultural activities. Another objective of the study ids to examine the
problem encountered by the bank branches in rendering their services to urban
dwellers.
SIGNIFICANCE OF THE
STUDY
The quality of any research work is embarked
based on the necessity to the society, that is the present need of the society.
The urban banking scheme is conceived as a source for increasing saving for
allocation to the productive sector of the urban economy most especially the
agricultural sectors with a view to boosting the well being and overall
development of the urban communities. This research is also concerned with the
conception the bankers have toward the urban banking, that it is costly and
nonprofit able venture. In the view of this research project although the
scheme might be short run, it will however be a major way in boosting the rapid
(happening very quickly) growth and development of the urban unorganized money
market have influenced on the economy for efficient utilization.
Nevertheless, the research will help students to know more about how urban
banking scheme serve as a tool for economic development and likewise meeting
the needs of the inhabitants through lending policies to finance some project
like agriculture, small scale indigenous business, government project etc.
SCOPE OF THE STUDY
This research study will use first bank of Nigeria Plc Edo state Benin City
located at Ring Road as a case study. The research will also examine how the
urban bank helped in boosting the overall economic development of Edo State, in
the area of mobilization of saving and needy sectors of economy. It also look
at the operations of the bank with respect to its lending policies adopted to
boost the agricultural sectors and the small scale indigenous industries in the
area.
DEFINITION OF TERMS
Bank: Bank can be defined as a financial institution
where money and other valuable things are kept for security purpose. Moreover,
bank is a place where money can be deposited and to be repaid on demand or due
time. It is a place where loans are negotiated.
Banker: A person who owns or manages a bank that is
someone who looks after the bank.
Banking: It is the business activities of a bank
such as lending money, receiving deposit, issuing notes discounting bills etc.
Deposit: A sum of money deposited or paid into a bank or
similar institutions to establish or to add to an account which the raw
materials needed for the operation of the bank.
Account: It is a written statement of money that is owned
to a business and of money that somebody has with a bank.
Fixed deposit
account: It is a special type of
deposit account operated by individuals, firms or public corporations with a
commercial bank, it is withdraw able only at the agreed time.
Current account: This type of account is normally operated by
traders, industrialists, public corporations as well as individuals. The
customer deposits a sum of money and can withdraw it without notice. The
withdrawal is made by using a cheque.
Loan: Is a credit facility granted by a bank to its
customers. It can be obtained from banks, private sources and other financial
institutions.
Cheque: Is a special printed form on which an order to a
bank to pay a sum of money from one’s account to another person is stated.
Investment: The money that you invest or the thing that you
invest in and the act of giving time or effort to a particular task in order to
make it successful.
Urban area: they are places that are distinguished from
villages.
Economic
development: Is the expansion in
the productive restructuring of that society to reflect quantitative and
qualitative changes in the mode of production and the improvement
of the life pattern of a vast majority of its people.
Osusu/Ajo: It is a traditional institution which act as a
means of safe keeping money collected from a group of individuals at the
interval of every month every week or market day at the end of which the person
takes possession of the whole money contributed. It continues until it has gone
to the turn every of every member.
Department | Banking and Finance |
Project ID Code | BFN0229 |
Chapters | 5 Chapters |
No of Pages | 72 pages |
Methodology | Descriptive |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |