IMPACT OF COMMUNITY BANKS ON RURAL DEVELOPMENT

CHAPTER ONE

1.  BACKGROUND OF THE STUDY

This study deals with the impact of community Banks on rural development.  But the study is on the Community  Bank in Enugu North Local Government.

In recent past, our rural dwellers have been finding it very difficult to save their money and other valuables in the Commercial Banks in urban areas.  This is because of the enormous paper work involved in opening a savings accounts and also distance in moving from where they are living to an urban location of commercial banks.  Community Banks are established financial institution to cater for the savings and credits needs of small scale producers throughout the country.  Inspite of government policy such as agricultural credit guarantee scheme, local dwellers face the constraint of not having a collateral to put down as a security before loans could be secured.

Conclusively, the commutative effect of these trends above include; low productivities, slow pace to development of the rural areas low accumulative capital to finance small scale businesses.

1.  STATEMENT OF PROBEMS

Rural development is now a matter  of crucial concern in most developing countries in general and Nigeria in particular.  Indeed the problem is to ensure that community banks has adequately impacted the rural communities.  However, some of these problems are:

• What impact has the Community Banks creates in rural dwellers.
• Are the banking habits of local dweller improved.

1.3     OBJECTIVES OF THE STUDY

This study is aimed at investing the impact of Community Banks on rural development.  It is also aimed at showing how Community Banking system had stimulated earning culture to the populace.  To identify the rapid enhancement of development productive activities in rural and urban areas.  To identify the improvement of the economic status of small producers in the informal sectors of the national economy of the rural community.

Conclusively, to suggest solutions and possible recommendations that would enhanced and speed up more development in the rural areas by the operations of the community banks.

1.4     RESEARCH QUESTIONS

• Are Community Banks really a modernization and simplification of an otherwise sophisticated banking system.
• How has the operation of community banks serve the development needs of the grassroots people.

1.  SCOPE OF THE STUDY

The scope of this study is limited only to Enugu North Local Government.  A case study of Umueze Community Development Association.  This is because of the time involve in covering the whole Enugu State.  The research is based, on finding but the impact of community banks on rural development and thus the rural dweller’s to be mindful of the operations of community bank.

1.  LIMITATIONS OF THE STUDY

Limitations are challenges that are bound to occur when carrying out a research project.  Some of the limitations during the course of this project are:

(i)      Time Factor:  The time allocated to this project was very short as wished by the researcher.

• Financial Constraints:This is a challenge encountered by the researcher in carrying out the project.It includes transportation fee foolscap fee, feeding fee as well as photocopying of some relevant information to facilitate the research project.
• Lack of equipped Library:Library was not equipped enough with current information.
• Apathetic behaviour of the respondent:This is problem involve in serving questionnaire and also when collecting it.

SIGNIFICANCE OF THE STUDY

It requires a little reasoning to discover that this  research will be of immense benefit to Community Banks and Local Communities.  It will be relevant to students of business and financial studies.

It will also serve as a literature review for further researchers.

Further more, this research work will enable Community Bank to the prospects of their effort toward rural development.  The local communities will see the impact of community banks on rural development.

Imperatively, it will serve as a means of re-discovering the problem faced by rural communities, and a possible modification to ensure their continuity.

Conclusively, it would be of immense benefit to the economy as a whole.  This is because the need for more community banks would arose, and therefore their activities would oil the wheel of the economy.