INTRODUCTION
1.1BACKGROUND OF THE STUDY.
A community bank which were established by federal government in December 1990 were designed to operate as a unit bank, a unit bank is the one which is authorized licensed to operate within a given locality where it is only authorized to open a simple office that serve as both head and Brach office.
The establishment of community banks nation wide was promoted by federal Government with a view of bringing modern banking services to the grass roots. The initiative to set up a community banks came from the central bank of Nigeria and Directorate of food roads and rural infrastructures (DFRI) a government agency oriented towards rural development and the promotion of self reverence and better economic conditions of rural and less privileged people the “raisin detre” for their promotion amongst several rural informal financial services, to inhabitants of such areas based largely on the ultimate knowledge of the credit workness of members of such community.
Mean while, National Board for community Banks ( NBCB) is the main supervisory organ for community banks. It is responsible for overall policy and performance of these banks. It supervise their banking activities, collects information on their performance and report quarterly to the central bank. The (NBCB) is expected to assist these banks in becoming viable financial institutions through constant motoring and supervision.
However the (NBCB) has not been able to cope with these responsibilities because, it has offered provisional licenses to a it could effectively cope with. As at end of 1995, the number of community banks operating in the country totaled 1,353. This was in excess of the (NBCB) supervisory capacity. According to Alozie (1997:30) the community banks, which were established by federal government in 1990, were designed to operated as the unit bank, he noted that a unit bank is one which is authorized (licensed to operate within a given locality where it is only authorized to open a simple office that serve as both head office and branch office.
Supporting the above view lideze (1996:28) State that community banks are special types of unit banks established to provide non-sophisticated service to a given geographical area. He noted that community banks are owed and managed by a community, a group of communities, a group of individual, or associations from, the community where they are located, and they operate like other commercial banks, he also stated that community banks are different from other commercial banks. In the following respects/areas:-
i.The ownership of community banks are rest ricted to associations, individuals of other groups from a given community or group of committees, while commercial banks are usually owned by various individuals scattered all over the country or state
ii.Their operations are retricted to a given geographical area since they are binked to link banks in united state of America.
iii.Community banks are not members of the central bank clearing house. The cheque of community banks are therefore cleared through commercial bank that serve as their correspondent banks.
iv.The National board for community banks ( NBCB) directly supervises community banks in Nigeria while the commercial banks are licensed and supervised diretly by the central bank of Nigeria (CBN)
Okome (1998:41) stated that the community banks were established to serve the rural and urban masses. He revealed that the community banking system was introduced in Nigeria in 1990 to serve as non-conventional bank that provides retail banking services and grant credit to the poor masses and small scale enterprises who can not satisfy stringent conditionally normally required by conventional banks for opening account and granting credit facilities.
The modern co-operative movement begin in England during the first part of nineteenth century there many years of experiment action, and many failed attempt before a successful co-operative was established. The turning point came in 1844 when the first successful co-operative, called the Rockdale, founded industry by twenty eight weavers came into existence (ie artisans) they founded a shop at Rockdale in great Briton thus, association workers other wise known as Rockdale Equitable pioneers contribute d a few pense per week and through it obtain initial capital & 28. With the capital they opened a retail shop from which the members bought some food items at cheep rate surpluses derived from the sales were distributed to the members on the basis of patronage.
Co-operative movement is on association of people with similar product, services or interests, formed to obtain greater bargaining power and other economics of scale.
Some of the features of co-operative movement are:-
i.They are registered under the industrial and provider societies.
ii.Their dividends are based on patronage
iii. Each member of co-operative movement has one vote irrespective of the number of shares holders.
The number of share s by number is limited
VThe co-operative movement is controlled by an elected committee
ViThey do not sell shares to the public
ViiThey are not required by law to publish their accounts
According to nwafor (1999:53) the community banks in Nigeria had contributed immensely to the growth of co-operative movement in Nigeria 1990, that all the member of reqisted co-operative movements has benefited a lot from them.
