THE IMPACT OF MICROFINANCE BANKS IN STIMULATING THE BANKING HABIT OF RURAL DWELLERS IN NIGERIA (A CASE STUDY OF ROYAL TRUST MICRO FINANCE BANK, IJU-ISHAGA, LAGOS

1.0       INTRODUCTION

The Central Bank of Nigeria in December 2005 published regulatory and supervisory framework for the regulation of microfinance banks and mandated all community banks operating in the country to submit to it plans for conversion latest by September 30th, 2006 and to finally convert latest 31st December, 2007.  

The practice of microfinance banking in Nigeria is culturally rooted and dated bank to several centuries. The traditional microfinance institution provides access to credit for the rural and urban dwellers and low income earners. They are mainly of the informal Self Help Groups (SHGs) or Rotating Saving and Credit Associations (RSCA) types. Other providers of microfinance services includes saving collector and cooperative societies.  

In order to enhance the flow of the financial services to the Nigeria rural areas, Government has in the past initiated a series of publicity financed micro credit progarmmes and policies targeted at the poor.    

1.1       STATEMENT OF PROBLEM

This research work will basically treat the impact of microfinance banks in stimulating the banking habit of the rural dwellers in Nigeria.

Furthermore to look into the features of microfinance banking and how it stimulates the banking habit of the rural dwellers in Nigeria.  

1.2       OBJECTIVES OF THE STUDY

The objectives of the study is to know the impact of microfinance banks on the banking habit of people in Nigeria and also to make recommendation on how such microfinance banks can improve their services so as stimulate the banking habit of the people in Nigeria especially those living in the rural parts of the country.

Also to know the rapid enhancement of the development of productive activities in the rural areas, hence, the improvement of the economic status of both the rural people and the promotion of the emergence of an effective and integrated national financial system that responds to the needs of the whole economy.

1.3       STATEMENT OF HYPOTHESIS

Hypothesis I

Ho:      Microfinance banking does not enhance the development of banking habit

Hi:       Microfinance banking enhance the development of banking habit.

Hypothesis II

Ho:      Microfinance banks services are geared towards the peasants rural dwellers and small scale business with a view of developing the banking habit of people.

Hi:       Microfinance banks services are geared towards the rich, urban dwellers and large scale business with a view of developing the banking habit of people.

1.4       SIGNIFICANCE OF THE STUDY

The study has revealed the importance and the impact of microfinance banks on the banking habit of rural dwellers, most especially the contributions of Royal Trust Microfinance banks on the development of the banking habits of people in its environs.

The result of the study will be useful to the following:

  1. i.                    Government: The result will be useful to the three tiers of government as well as the arms of government in formulating their respective policies as touching the monetary and economic policies.
  2. ii.                  Communities: Local communities (towns and villages) will find the result of the project useful in the area of determination and creation of small scale community based employment opportunities for the dwellers.
  3. iii.                Individuals and Corporate Bodies: This set of people will find the result of the project useful in the area of mobilization of credit for smooth running of their businesses in the case of corporate bodies and in the area of building savings for self actualization.

1.5       SCOPE AND LIMITATION OF THE STUDY

This research is centered on the impact of microfinance banks in simulating the banking habit of rural dwellers in Nigeria. Royal Trust Microfinance Bank is used as a case study for the purpose of the research work.

This research wok has suffered some set back by ways of saving access to some vital information and documents. Also on the case of the research work, there is a financial problem faced before the completion of this research work.  

1.6       HISTORICAL BACKGROUND OF THE CASE STUDY

Royal Trust Microfinance Bank was incorporated on February 21st, 1992 as Ifako / Iju Ishaga Community Bank. In the year of incorporation, the bank carried out community banking services. The services performed by the bank include opening of savings, time and demand deposit accounts and Ajo or Esusu daily contributions from market women or sole traders. 

However, this name was changed to Royal Trust Community Bank Limited effective from July 31st, 2003 as a result of re-engineering and recapitalization processes by the new stakeholders.

The bank later changed to Royal Trust Microfinance Bank due to the recapitalization and restructuring of community banks to microfinance banks by the Central Bank of Nigeria. The corporate address of the bank is at 25, Agbdo Roa, Iju-Ishaga, Lagos.

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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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