INTRODUCTION
OVERVIEW OF THE STUDY
In Nigeria, it can be said that the activity of the stabilize banking
in the rural area is such that the branches were beguiled by the rules,
traditions and policies of the headquarters. But relative to the
commercial bank, community bank were opened in the rural area to meet
the financial needs of the occupants by mobilizing their resources into
current and saving account. This in turn within the resources of the
banking institution can concerned with the cr3eatrion of credit for the
rural dwellers for the purpose of increasing their production activity
either as individual or a group of industrialist, farmers or o-operative
society, the Nigeria banking system, its operation, location service in
pre – 1977 were concentrated in the urban areas of the country and this
brought the concentration of economic activity on the urban areas at
the detriment of the rural communities. However, the reason for
establishing banks in the rural area was because of lack infrastructures
facilities in the rural areas, low level of economic activity. The
colonial policy of establishing banks in the urban areas where economic
activity has been in existence, the preference of the bank worker to
work in the urban areas where faculty and comfortable living are
available. In the attempt to correct the abnormal banking system, the
(CBN) central bank of Nigeria in 1978 introduced the rural banking
scheme (the Nigeria 1987 by Herbte O. Orji 1979) the first bank to
establish its bank branches in he rural area, that have potential
capability for contribution to the Nigerians economic development. It
involves the establishments of new bank branches of new and existing
bank in the rural areas of the country and the provision of the banking
service to the rural communities that has developed and show rural
characteristics.
By this the central bank of Nigeria will have to determine the
situation where the rural community which have a population of at least
not less than (500) five hundred people and an establish economic and
social institution such local industries adequate on the local market,
hospitals, schools and other private and government institution.
The scheme was phased into four;
The first phase was to establish 200 banks between 1977 and 1980. However the phase ended up in archiving only twelve braches
C.B.N bulletined January/ march 1987, Page. 29
The second phase which stated in 1981 with 266 bank branches to be
opened but 258 chess bank were actually spend during that period. The
third phase also commence in 1954 with the total branches of 300 to be
opened. The number of the commercial bank branches opened in 1988 under
this phase of the programme increase from 72 to 144. Also during this
period under the review one more branched were opened on the second
phase bridging the number to 258. Consequently the total number of banks
establishes under the rural banking programme raise from 72 to 602 in
1988. Similarly the number of urban bank increases by 124 in 1988
bringing the number of the total branches to 1101. The fourth phase of
rural banking is about to set in motion but ther4 has been nice tiding
of the implementation.
According to business time Monday 9th April (1990) the united bank of
Africa has made a proposal for the scrap [ping of the fourth phase of
the rural banking programme of the government, instead they adopted for
the establishment of more urban banks branches which has a little
promise of more economic development. The augment on the line is the
rural banking scheme program to support bankable project, economic
project and economic activity whereas the banking in urban still has a
lot of untapped resources that can be mobilized through a deliberate
programme of increased urbane banking braches.
The managing director U.B.A Allahaji Sulaiman Baffa emphasis that
bank has reach the limit’s in setting up the rural banking program only
to discover that this prospect where lean and stretched far between. As a
result of this community bank were established.
The community as a financial institution established to cater for the
saving the credit need of the small-scale producers. The shareholders
are normally the customers. They have a share capital of 250,000.00 and
only one tenth of the amount is guaranteed to the customers as a loan.
The decree establishing this bank has promulgated in the in 1990 and the
bank has a board hat laid out policies and did the managers head a
management. The policies are guided by the decree of the 1990. The works
of the community bank are numerous.
STATEMENT OF PROBLEM
Nigeria is highly under banked. The central bank of Nigeria
introduced that rural banking scheme (RBS) in 1977 with the three phase
of calendar of 1977 – 1980 – 1985 and 1985 – 1987. In 1985 24 commercial
bank and twelve merchant banks were to serve a projected of population
of one million. This nears 80,000 persons to one banking office or
30,000 persons. The inadequacy of banking facility in Nigeria become
growing.. The existing bank office are concentrated n the urban and the
commercial centers. Because the bulk of the population is in line in
this areas. The essence of banking institution in this rural both of the
country at large. Therefore there is need to extend the banking service
to this areas. Unfortunately however, the commercial bank seems
virtually to have return into these rural areas perhaps with good
reasons.
The purpose of this study is found out what problem associated with
Ekulu community bank in Enugu state of Nigeria and based on the analysis
finding to show how banking in the rural areas can be improved. Such
problem could be formed in the following questions
Are community bank been adequately funded by the federal government
Dose the community bank has a qualify manpower
OBJECTIVE OF THE STUDY
The objective of the study is to investigate into the achievement of
Ekulu community bank in Enugu state as well as the problem that has been
militating against their efficiency since the inception of the
community banking in Enugu state. Specifically, the researcher intends
to archive the following objectives;
(a) To identify he achievement of the community bank in
Enugu state with regard to grating of credit, mobilization of savings
and inculcation of banking habit in the inhabitant of the various
community.
(b) To identify problem militating against the adoption
of the desired banking habits by the various community in Enugu state.
(c) To find out the problem militating against the efficiency of service of the community bank in Enugu.
(d) To find ways/means of improving on the service of the
community bank so as to ensure the survival through efficient service
and customers patronage]
RESEARCH QUESTIONS
A set of well-structured questions was administered on the staff of Ekulu community bank, which is in the area.
The questions are as follows;
1.one of the objective of establishing the community bank by the
federal government is to promote the rural development by providing
financial and banking service as well as other facilities to community
that has inadequate supply with such facilities, to which extent has
your bank gone in archiving such objectives.
2. What are the achievement f Ekulu community bank in your locality
with regard to granting of credit, mobilization of saving and
inculcation of saving habits in the inhabitants of the community?
3. What are he problem militating against the desired adoption go the
banking system and service and what are the problem affective the
service rendered by Ekulu community banks in Enugu state?
4. Enumerate the way/means of solving the problems in the community of the mentioned areas particularly with respect to this
(a) Problem associated with control by the influential people
(b) Dependency on the suspending banks
(c) Transfer of fund
(d) Unqualified staff
(e) Lack of training and poor motivation.
5. What are the other problem apart form the above which you have
identify and the proper way of solving so as to ensure the survival and
the success of Ekulu community bank and also as a unit bank, what do you
observed as problem which affects the progress of the bank?
6. What is the effort made to ensure wide publicity of service rendered by the community banks?
FORMULATION OF HYPOTHESIS
In order to ensure indept analysis of the data collected to purpose
as well steam line guide toward the data analysis, the researcher
formulated the following hypothesis
Null hypothesis:
Ekulu community bank has made a remarkable achievement in its area of operation
Alternative hypothesis:
Ekulu community bank has made no remarkable achievement in its area of operation.
Null hypothesis Ho:
There are problem militating against the progress of Ekulu community bank in Enugu state
Alternative hypothesis Ha:
There are no problem militating against the efficiency of the Ekulu community bank in Enugu state
SIGNIFICANCE OF THE STUDY
As this research project is intended to be fact finding and problem
solving, the project recommendation if adopted will sensitized the
inhabitants of the various community in the state toward adopting a
healthy banking habits so as to partroniously and effectively help this
community bank within the domicile.
Also the recommendation will be helpful in giving an insight into the
ways of solving the problems with varicose means of improving the
service offered by the community banks so as to ensure the continued
survival and success through their customers in their patronage. This is
because according to Zober, the benefit will be improve banking service
in each level of the community and accerelleted development in the
country
SCOPE OF THE STUDY
The researcher project is design to be carried out in five phase and
consequently presented in five chapters. Chapter one is introducing the
topic which a little details. It dealt with the overview of the study,
statement of the proems, research objective, research questions and
hypothesis. Also his chapter dealt on the significant of the study as
the definition of the various terms and observation used by the
researcher.
Chapter two is the literature review where the researcher presented
very little of her opinion and extensively review the work,
contributions and records of various aspect and professional in the
field of the study been researched.
The third chapter is where the researcher has explained detailed of
how he carried out the research particularly with regard to the
population sampling, source of data, data collection and location and
data, questionnaire design and methodology.
Chapter four deals with the data analysis and presentation. Chapter
five is where the researcher presented the summary of the findings,
discussion of the findings as well co-recommendation for the
improvement. In this chapter, the researcher made certain suggestion and
recommendation for the future.
LIMITATION OF THE STUDY
This research is limited to only Ekulu community bank in Enugu state.
This is due to the research time and financial constraint, furthermore,
the socio-economic environment of this community bank are not exactly
alike all over the country. This fact thus pose a limitation to the
general ability of the findings and recommendation made in this research
work.. This limitation not withstanding, the research recommendation of
this research is very vital to the effective community banking service
and to the survival and success of the community banking in the country.
Where that this community banks has similar charteristic and operate
under similar code of conduct, the research in her literature review did
not delimit it to contribution from Enugu state but expanded her
literature review to involve all experts and professional all over the
country.
DEFINITION OF TERMS
Some terms have been define as to make this work more meaningful
Banking; a bank can be simply defined as a financial institution
where money and other valuable item such as gold, examination question
paper, certificate etc are kept. The definition narrow down the numerous
economic and social functions performed by the bank. Today banks
perform such vital function such as accepting of deposit from the
customers, discounting the bill of exchanges, grating loan and advance,
giving advice to the customers, loan syndication, issue of latter of
credit, financing a development project, act as a suretee and executor
of wills. It should be noted that function on the level of development
of a giving society
Community banking: community bank is a financial institution
established to cater for the credit needs of small-scale producers
through out the country. It differs from a conventional commercial bank
in many respect for example, it dose not undertake any literal business
transaction and must be affiliated to conventional commercial bank which
serve as a correspondent bank to the community bank. Some of the
function includes the acceptance of all type of deposit act as an agent
to take care of their customers. They give money as loan and hold more
catalyst as an agent of development in the rural area through
collaboration with the local government authority. Community development
association’s co-operative society and non-governmental organization.
Also community bank assist the rural and urban poor to be more
productive, increase the income and the output of small-scale producers
and transfer subsistence economic activity into commercial ones. They
also sell and issue draft to their customers.
Community development association (CDA): the term community
development association as used in the project refer to such community
organization as town union or districts association or similar bodies
that represent the traditional apex organization for the planning and
detecting development activities within the country.
National board of community banks (NBCB): the federal government
under the decree 40 of 1990 has established the national board for
community banks. The board was officially unregulated on Tuesday 16 July
1991. The primary objective of establishing the board is to promote,
monitor and supervise generally the operation of the community banks in
compliance with the operational guideline stipulated by the policies and
direct generally the operating of the community banking system. It
arranges, co-ordinates and facilitates adequate training for the
personnel of the community banks. NBCB overseas the activity of the
community banks and reports this to the central bank of Nigeria (CBN)
which is the apex bank in charge of all the financial institution in the
country