THE DEVELOPMENTAL IMPACT OF RURAL BANKING IN NIGERIA (A CASE STUDY OF UNITED BANK FOR AFRICA PLC)

THE DEVELOPMENTAL IMPACT OF RURAL BANKING IN NIGERIA (A CASE STUDY OF UNITED BANK FOR AFRICA PLC) 

    1.0            INTRODUCTION  

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 rural area.

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 banking sector.

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.

1.1     AIMS AND OBJECTIVES

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.

1.2            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 dwellers.

The problem therefore is how to resolve the profit motive of the rural commercial banks and the essential services being rendered to the rural 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

1.3            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.

1.4            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 workers.

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.

1.5            LIMITATION OF SCOPE:

In the process of carrying out the research focuses on the development of rural banking in Nigeria with United Bank for Africa (Rural Branches) as case study concrete efforts were been made to arrive at a logical conclusion.  However, the work was subject to certain limitations.

Financial constraint is another limitation to this works which is as a result of high cost of transportation fare to the various bank branches together data, cost of material to carry this work to conclusive standard was equally important.

Respondents turned out to be co-operating by completing the questionnaires, which took lot of time and energy to convince them.

1.6            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.

H1:     Apart from the rural farmers, the United Bank of Africa does not source fund from other activities of the rural banking.

Ho2:   The United Bank of Africa make adequate benefit from the accumulated investments of urban banking.

Ho3:   The United Bank of Africa does not derive any benefit from the accumulated investments of rural banking.

1.7            DEFINITION OF TERMS:

BANK:

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.

RURAL AREA:

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.

RURAL BANK:

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. project topics   final year project topics and research materials 

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:

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.

ECONOMIC DEVELOPMENT:

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,

MONETARY POLICY:

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.

EMPLOYMENT:

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.

MARKETING:

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.

LOAN:

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.

PRODUCT UNITY;

Engaging in the ration of economic value and quality involving manufacturing of goods and services.

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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