Project Abstract

Project Overview

<p> </p><p><b>INTRODUCTION</b></p><p>Banking service when introduced in our rural areas<br>will bring development or specifically economic development to the doorstep of<br>every citizen in this country since between 70 – 80 percent of Nigerians lives<br>in the rural area.</p><p>Every Nigeria want to go to the<br>urban area because of availability of infrastructural amenities like<br>electricity, good roads, pipe borne water, civilized market operation, job<br>opportunities and so on. If these social<br>amenities continue to exist in urban areas, life in rural areas will still<br>remain underdeveloped. Money they say is<br>the blood that nourishes or gives life to any prosperous economy of a<br>nation. For money to accomplish its aims<br>in an economy, it needs to be properly managed and controlled in the banking<br>sector.</p><p>Agriculture is the second major<br>sources that generate revenue to the Nigeria government after oil<br>industry. The sector of the economy<br>right from time has been neglected. The<br>rural areas have not felt any positive impact on the development plan but only<br>recorded a decline in agricultural productivity, which shows that the rural<br>areas have been neglected at the expense of the urban areas.</p><p>The banking industries one of<br>every nations sectors that has a controlling impact on the economy particularly<br>in terms of monetary policy, this is why federal government has continuously<br>encouraged banks to expend their services and facilities not only to the urban<br>cities but also rural areas.</p><p>1.1 &nbsp; &nbsp; &nbsp; <b>AIMS AND OBJECTIVES</b></p><p>This research work is aimed at investigating the<br>impact the rural banking services, commercial banks have on the productivity of<br>small and medium agricultural farmers and the entire economic activities of the<br>rural areas. This project work also<br>aimed at acquainting ourselves with the benefit of rural banking services in<br>terms of mobilizing and organizing present farmers into efficient and active<br>co-operative groups, small and medium scale farmers and integrated rural<br>communities.</p><p>The objective of this research is<br>to evaluate how effective credit allocation among productive activities the<br>rural areas have been realized.</p><p>Finally, the aim of the project<br>work is to suggest policy measures to government in improving rural banking so<br>as to have the desired development impact on the rural areas in Nigeria.</p><p>1. &nbsp; &nbsp; <br><b>STATEMENT OF RESEARCH<br>PROBLEMS:</b></p><p>The commercial bank is a profit making<br>organization. There is a great fear in<br>establishing in rural areas where it cannot maximize profit. Rural banking has been seen as indispensable<br>if the nation is to develop its rural areas. <br>The development of one rural area may not be a reality if services of<br>commercial banks are not at the reach of our rural dwellers.</p><p>The problem therefore is how to<br>resolve the profit motive of the rural commercial banks and the essential<br>services being rendered to the rural dwellers. <br>This project work is designed to measure to what extent the rural<br>commercial banks have been able to involve the rural dwellers in the economic<br>activities in terms of awareness and</p><p>1. &nbsp; &nbsp; <br><b>SIGNIFICANCE OF STUDY:</b></p><p>Nigeria is a developing country with more than 70<br>percent of her population living in the rural areas. These rural dwellers are faced with lot of<br>hardship in terms of basic infrastructures. <br>The rural dwellers are mostly farmers, definitely require loans, to<br>reduce the hardship involved in acquiring input as well as cultivating their<br>farms, therefore, the services of banking becomes very essential.</p><p>This study is essentially<br>significant in that it is directed towards evaluating the effect the growth of<br>rural banking activities has on the rural inhabitants which is a criteria aimed<br>by measuring economic standard. It is<br>also significant in the sense that it shows to what extend the rural banking<br>programme in Nigeria has been successful.</p><p>Conventional economics and<br>experience suggest that by supplying food, labour and invisible surplus, the<br>rural areas help to generate urban income and employment. They also help to stabilize if not reduce<br>production cost for industries and cost of existences of commercial banks in<br>the rural areas will speed up investment.</p><p>1. &nbsp; &nbsp; <br><b>SCOPE OF STUDY:</b></p><p>This study is limited to Enugu State, a state<br>comprising of eighteen (18) local government area each having one or more rural<br>bank(s). For ease of information we<br>would restrict to Awgu, Nkanu East dwellers. <br>This project work is designed to measure to what extent the rural<br>commercial banks have been able to involve the rural dwellers in the economic<br>activities in terms of awareness and influence on their style of living through<br>banking activities and how successful the banks are measuring up with their<br>major aim of existence. The government<br>has accepted banking persuasive rather than forcing banks to establish branches<br>in the rural areas.</p><p>Most villages are without<br>electricity and pipe borne water and the banks spend much more that customers<br>deposit to provide these amenities for workers.</p><p>A major problem is that the rural<br>dwellers don’t patronize the bank industries. <br>Most of the rural dwellers are farmers. <br>They go to the farm before the bank starts its business and return only<br>after they have closed to customers. <br>Hence the bank finds it difficult to make profit.</p><p>The rural banks encounter lot of<br>problems cultivating banking habit in the rural dwellers. Rural dwellers live in mutual suspicion with<br>strangers, for that rural branches workers are affected.</p><p>The rural banks also encounter<br>problems of granting loans to rural dwellers and small scale businessmen in the<br>rural areas. Because they are not too<br>aware about why bank lend them loan, they use this loan for marrying wives,<br>thus means of repayment becomes a problem.</p><p>Although United Bank for Africa<br>(UBA) has been chosen as a case study, other banks like Union Bank of Nigeria<br>(UBN), first Bank of Nigeria, All States Trust Bank, Citizens Bank etc, can<br>find this study beneficial to hem since they are all operating the same<br>economic environment.</p><p>The study focuses attention to<br>the impact of rural banking in the development of rural areas.</p><p>1. &nbsp; &nbsp; <br><b>LIMITATION OF SCOPE:</b></p><p>In the process of carrying out the research focuses<br>on the development of rural banking in Nigeria with United Bank for Africa<br>(Rural Branches) as case study concrete efforts were been made to arrive at a<br>logical conclusion. However, the work<br>was subject to certain limitations.</p><p>Financial constraint is another<br>limitation to this works which is as a result of high cost of transportation<br>fare to the various bank branches together data, cost of material to carry this<br>work to conclusive standard was equally important.</p><p>Respondents turned out to be<br>co-operating by completing the questionnaires, which took lot of time and<br>energy to convince them.</p><p>1. &nbsp; &nbsp; <br><b>STATEMENT OF RESEARCH<br>HYPOTHESIS:</b></p><p>The following hypothesis has been formulated to<br>which the study will attempt providing answers.</p><p>Ho: &nbsp; &nbsp; The United Bank of Africa UBA makes use of techniques/methods<br>in determination of its return in rural banking.</p><p>H1: &nbsp; &nbsp; &nbsp; &nbsp; Apart<br>from the rural farmers, the United Bank of Africa does not source fund from<br>other activities of the rural banking.</p><p>Ho2: &nbsp; &nbsp; The<br>United Bank of Africa make adequate benefit from the accumulated investments of<br>urban banking.</p><p>Ho3: &nbsp; &nbsp; The<br>United Bank of Africa does not derive any benefit from the accumulated<br>investments of rural banking.</p><p>1. &nbsp; &nbsp; <br><b>DEFINITION OF TERMS:</b></p><p>BANK:</p><p>According to the Nigerian Banking<br>Act, 1969 (as amended Bank amendment act 1979), a bank is described as the<br>business of receiving money from outside source as deposits irrespective of the<br>payment of interest and the granting of money, loan and acceptance of credited<br>or the purchase of bills and cheques or the purchase and sale of securities for<br>account of those or the incurring of the obligation to acquirer claims<br>irrespective of loan prior to their maturity or the assumption of guarantees<br>and other warranties for others or the commissioner may on the recommendation<br>of the central bank by order publish the federal gazette designed as banking<br>business.</p><p>RURAL AREA:</p><p>According to Webster’s New Word<br>Dictionary, it refers to that not being characterized with citizen or urban<br>life. That is usually associated with<br>farming and agriculture. The rural area<br>has the features of low level of literacy, poor health facilities, and<br>inadequate family planning, low technology and inadequate infrastructures. In addition, a prominent phenomenon in rural<br>areas is that the people who live there have as integrated culture and social<br>system as their way of life. Development<br>is carried out as group efforts in a community. <br>In Nigeria, majority of people who live in rural areas earn their main<br>income from agriculture.</p><p>RURAL BANK:</p><p>A rural bank can be described as<br>a brand of existing bank established in the rural area to provide banking<br>services for rural population. These<br>services could be in the form of motivation, rural saving, credit allocation<br>among productive activities of the rural population and linkage of money market<br>in the rural areas with the capital market in the urban centers, in other<br>words, the adequate efficient and equitable allocation of resources amongst<br>different sectors of the rural economy.</p><p>The scope of the activities and<br>operations of a rural bank is similar to that of commercial bank establishing<br>it but limited due to a verity of reasons. <br>The primary role expected of a rural bank should be the finance of identified<br>rural development projects of short and medium terms duration. But given constraints in finding and the need<br>to have it becomes obvious that it will be desirable and viable that projects<br>of the following categories should be financed by any rural banks.</p><p>RURAL BANKING PROGRAMME:</p><p>This is a programme embarked upon<br>by the Nigeria government in 1977 with the aim of extending banking habit to<br>the rural area by mobilizing rural savings, assisting government in<br>implementing monetary and other development policies. The programme is also aimed at making<br>productive an activity receive adequate attention by way of allocating<br>credits. The implementation of the<br>programme is the moments in 1977-1980; 1980-1983 (later extended to 1985) and<br>1985-1989).</p><p>DEVELOPMENT:</p><p>Development should be perceived<br>as a multidimensional process involving the re-organisation and orientation of<br>entire economic and social system. In<br>addition, to improve income and output, it typically involves radical changes<br>in population, attitude customer and belief.</p><p>Finally, although development is<br>usually defined in the national context its wide spread realization,<br>modification of the international, economic and social order.</p><p>ECONOMIC DEVELOPMENT:</p><p>This term has generated a lot of<br>controversies over the years. Some<br>economics see it as political and structural change while others are of the<br>opinion that it relates the progress in the basic human needs over time. Another school of thought defines it as<br>growth accomplished by changes i.e. change in structure of the economic in the<br>country’s social structure and its political structure.</p><p>Others have tended to make basic<br>human needs approach, an approach which defined economic development in terms<br>of progress toward reducing the incidence of poverty, unemployment and income<br>inequalities and for those whose living standards have not been rising. This approach also seeks ways and means of<br>improving their conditions,</p><p>MONETARY POLICY:</p><p>The monetary policy of a nation<br>is a fact of its broad economic policies. <br>It deals with the discretionary control of money supply by monetary<br>authorities in order to achieve desired economic goals.</p><p>STANDARD OF LIVING:</p><p>This could be linked with the<br>level of substance, as of a nation, society, class or person with reference to<br>the adequacy of necessities in daily life as a result of varying per capita<br>income; people equally vary in their standard of living. The per capita income in the United States of<br>America for example cannot be compared to that of developing countries like<br>Nigeria.</p><p>Consequently, the standard of<br>living differs, and perhaps, the nature of facilities and economic activities<br>present in urban areas make standard of living differ from the urban area and<br>the rural dwellers.</p><p>EMPLOYMENT:</p><p>In the simplest form, employment<br>refers to the engaging, hiring or making use of the services of a person with the<br>view of compensating him or her with wages. <br>As a result of the economic recession in Nigeria employment problem has<br>not been adequately tackled.</p><p>MARKETING:</p><p>Whenever one engages in doing<br>anything to create satisfaction that the person has engaged in marketing, be it<br>production of goods or rendering services. <br>The challenges that face marketing are that of generating ideas and<br>avenues of satisfying consumers needs and want at a profit in a socially<br>responsible manner. Marketing involves<br>any interpersonal, inter-organizational relationship with the result of<br>exchanging processes; it related the exchange of ideas, goods and services.</p><p>LOAN:</p><p>This is the amount granted to<br>individual companies, banks or any organization by commercial banks or any<br>other financial institution for a specific period when the money may be paid<br>back with interest.</p><p>PRODUCT UNITY;</p><p>Engaging in the ration of<br>economic value and quality involving manufacturing of goods and services.</p> <br><p></p>