This research work, the developmental impact of rural banking in
Nigeria, a case study of United Bank of Africa (UBA) PLC Agbani Road Branch,
Enugu was carried out to measure to what extent the rural commercial banks have
been able to involve the inhabitant of the rural areas in economic activities
and how successful the bank are measuring up with their major aim of
existence. Sequel to this, the researcher employed a population size of
25 staffs of United Bank of African PLC, Agbani, Road Branch. A
population sample of 20 being the number of questioners respondent was
equally employed, also the researcher employed percentage frequently
,statistical techniques to analyze the data sources, the researchers
findings, indicate that rural banking program mes is making a meaningful impact
on the development of a rural areas especially in agricultural
development. Thus there are hindrance such as inadequate funding, and
inability to repay loans as at when due the researcher in turn recommends that
efforts to land rural banking should be sustained, the Central Bank in
particular under whose umbrella the rural banking programme is being executed
should evolve executable policy frame work towards increases rural
CHAPTER 1: INTRODUCTION
Background of the Study
Statement of Research
Statement of Research Hypothesis
CHAPTER 2: REVIEW OF RELATED
CHAPTER 3: RESEARCH METHODOLOGY
Brief Outline of the Chapter
Sources of Data
Organising and Analyzing Gathered
CHAPTER 4 : DATA PRESENTATION AND ANALYSIS
Test of Hypothesis
CHAPTER 5: DISCUSSION OF FINDINGS
(RESULTS), CONCLUSIONS AND RECOMMENDATIONS
Banking service when introduced in our rural areas will bring
development or specifically economic development to the doorstep of every
citizen in this country since between 70 – 80 percent of Nigerians lives in the
Every Nigeria want to go to the urban area because of availability
of infrastructural amenities like electricity, good roads, pipe borne water,
civilized market operation, job opportunities and so on. If these social
amenities continue to exist in urban areas, life in rural areas will still
remain underdeveloped. Money they say is the blood that nourishes or
gives life to any prosperous economy of a nation. For money to accomplish
its aims in an economy, it needs to be properly managed and controlled in the
Agriculture is the second major sources that generate revenue to
the Nigeria government after oil industry. The sector of the economy
right from time has been neglected. The rural areas have not felt any
positive impact on the development plan but only recorded a decline in
agricultural productivity, which shows that the rural areas have been neglected
at the expense of the urban areas.
The banking industries one of every nations sectors that has a
controlling impact on the economy particularly in terms of monetary policy,
this is why federal government has continuously encouraged banks to expend
their services and facilities not only to the urban cities but also rural areas.
Background of the Study
This research work is aimed at investigating the impact the rural
banking services, commercial banks have on the productivity of small and medium
agricultural farmers and the entire economic activities of the rural
areas. This project work also aimed at acquainting ourselves with the benefit
of rural banking services in terms of mobilizing and organizing present farmers
into efficient and active co-operative groups, small and medium scale farmers
and integrated rural communities.
The objective of this research is to evaluate how effective credit
allocation among productive activities the rural areas have been realized.
Finally, the aim of the project work is to suggest policy measures
to government in improving rural banking so as to have the desired development
impact on the rural areas in Nigeria.
Statement of Research Problems:
The commercial bank is a profit making organization. There
is a great fear in establishing in rural areas where it cannot maximize
profit. Rural banking has been seen as indispensable if the nation is to
develop its rural areas. The development of one rural area may not be a
reality if services of commercial banks are not at the reach of our rural
This project work is designed to measure to what extent the rural
commercial banks have been able to involve the rural dwellers in the economic
activities in terms of awareness.
Significance of Study:
Nigeria is a developing country with more than 70 percent of her
population living in the rural areas. These rural dwellers are faced with
lot of hardship in terms of basic infrastructures. The rural dwellers are
mostly farmers, definitely require loans, to reduce the hardship involved in
acquiring input as well as cultivating their farms, therefore, the services of
banking becomes very essential.
This study is essentially significant in that it is directed
towards evaluating the effect the growth of rural banking activities has on the
rural inhabitants which is a criteria aimed by measuring economic
standard. It is also significant in the sense that it shows to what
extend the rural banking programme in Nigeria has been successful.
Conventional economics and experience suggest that by supplying
food, labour and invisible surplus, the rural areas help to generate urban
income and employment. They also help to stabilize if not reduce
production cost for industries and cost of existences of commercial banks in
the rural areas will speed up investment.
Scope of Study:
This study is limited to Enugu State, a state comprising of
eighteen (18) local government area each having one or more rural
bank(s). For ease of information we would restrict to Awgu, Nkanu East
dwellers. This project work is designed to measure to what extent the
rural commercial banks have been able to involve the rural dwellers in the
economic activities in terms of awareness and influence on their style of living
through banking activities and how successful the banks are measuring up with
their major aim of existence. The government has accepted banking
persuasive rather than forcing banks to establish branches in the rural areas.
Most villages are without electricity and pipe borne water and the
banks spend much more that customers deposit to provide these amenities for
A major problem is that the rural dwellers don’t patronize the
bank industries. Most of the rural dwellers are farmers. They go to
the farm before the bank starts its business and return only after they have
closed to customers. Hence the bank finds it difficult to make profit.
The rural banks encounter lot of problems cultivating banking
habit in the rural dwellers. Rural dwellers live in mutual suspicion with
strangers, for that rural branches workers are affected.
The rural banks also encounter problems of granting loans to rural
dwellers and small scale businessmen in the rural areas. Because they are
not too aware about why bank lend them loan, they use this loan for marrying
wives, thus means of repayment becomes a problem.
Although United Bank for Africa (UBA) has been chosen as a case
study, other banks like Union Bank of Nigeria (UBN), first Bank of Nigeria, All
States Trust Bank, Citizens Bank etc, can find this study beneficial to hem
since they are all operating the same economic environment.
The study focuses attention to the impact of rural banking in the
development of rural areas.
Statement of Research Hypothesis:
The following hypothesis has been formulated to which the study
will attempt providing answers.
Ho: The United Bank of Africa UBA
makes use of techniques/methods in determination of its return in rural banking.
Apart from the rural farmers, the United Bank of Africa does not source fund
from other activities of the rural banking.
The United Bank of Africa make adequate benefit from the accumulated
investments of urban banking.
The United Bank of Africa does not derive any benefit from the accumulated
investments of rural banking.
Definition of Terms:
According to the Nigerian Banking Act, 1969 (as amended Bank
amendment act 1979), a bank is described as the business of receiving money
from outside source as deposits irrespective of the payment of interest and the
granting of money, loan and acceptance of credited or the purchase of bills and
cheques or the purchase and sale of securities for account of those or the
incurring of the obligation to acquirer claims irrespective of loan prior to
their maturity or the assumption of guarantees and other warranties for others
or the commissioner may on the recommendation of the central bank by order
publish the federal gazette designed as banking business.
According to Webster’s New Word Dictionary, it refers to that not
being characterized with citizen or urban life. That is usually
associated with farming and agriculture. The rural area has the features
of low level of literacy, poor health facilities, and inadequate family
planning, low technology and inadequate infrastructures. In addition, a
prominent phenomenon in rural areas is that the people who live there have as
integrated culture and social system as their way of life. Development is
carried out as group efforts in a community. In Nigeria, majority of
people who live in rural areas earn their main income from agriculture.
A rural bank can be described as a brand of existing bank
established in the rural area to provide banking services for rural
population. These services could be in the form of motivation, rural
saving, credit allocation among productive activities of the rural population
and linkage of money market in the rural areas with the capital market in the
urban centers, in other words, the adequate efficient and equitable allocation
of resources amongst different sectors of the rural economy.
The scope of the activities and operations of a rural bank is
similar to that of commercial bank establishing it but limited due to a verity
of reasons. The primary role expected of a rural bank should be the
finance of identified rural development projects of short and medium terms
duration. But given constraints in finding and the need to have it
becomes obvious that it will be desirable and viable that projects of the
following categories should be financed by any rural banks.
Rural Banking Programme:
This is a programme embarked upon by the Nigeria government in
1977 with the aim of extending banking habit to the rural area by mobilizing rural
savings, assisting government in implementing monetary and other development
policies. The programme is also aimed at making productive an activity
receive adequate attention by way of allocating credits. The
implementation of the programme is the moments in 1977-1980; 1980-1983 (later
extended to 1985) and 1985-1989).
Development should be perceived as a multidimensional process
involving the re-organisation and orientation of entire economic and social
system. In addition, to improve income and output, it typically involves
radical changes in population, attitude customer and belief.
Finally, although development is usually defined in the national
context its wide spread realization, modification of the international,
economic and social order.
This term has generated a lot of controversies over the
years. Some economics see it as political and structural change while
others are of the opinion that it relates the progress in the basic human needs
over time. Another school of thought defines it as growth accomplished by
changes i.e. change in structure of the economic in the country’s social
structure and its political structure.
Others have tended to make basic human needs approach, an approach
which defined economic development in terms of progress toward reducing the
incidence of poverty, unemployment and income inequalities and for those whose
living standards have not been rising. This approach also seeks ways and
means of improving their conditions,
The monetary policy of a nation is a fact of its broad economic
policies. It deals with the discretionary control of money supply by
monetary authorities in order to achieve desired economic goals.
Standard of Living:
This could be linked with the level of substance, as of a nation,
society, class or person with reference to the adequacy of necessities in daily
life as a result of varying per capita income; people equally vary in their
standard of living. The per capita income in the United States of America
for example cannot be compared to that of developing countries like Nigeria.
Consequently, the standard of living differs, and perhaps, the
nature of facilities and economic activities present in urban areas make standard
of living differ from the urban area and the rural dwellers.
In the simplest form, employment refers to the engaging, hiring or
making use of the services of a person with the view of compensating him or her
with wages. As a result of the economic recession in Nigeria employment
problem has not been adequately tackled.
Whenever one engages in doing anything to create satisfaction that
the person has engaged in marketing, be it production of goods or rendering
services. The challenges that face marketing are that of generating ideas
and avenues of satisfying consumers needs and want at a profit in a socially
responsible manner. Marketing involves any interpersonal,
inter-organizational relationship with the result of exchanging processes; it
related the exchange of ideas, goods and services.
This is the amount granted to individual companies, banks or any
organization by commercial banks or any other financial institution for a
specific period when the money may be paid back with interest.
Engaging in the ration of economic value and quality involving
manufacturing of goods and services.
TERMS AND CONDITIONS APPLY
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