THE ROLE OF COMMUNITY BANK IN A DEPRESSED ECONOMY
: A CASE STUDY OF EDO STATE ECONOMY
ABSTRACT
This project work was about the role of community banking on the economy of Nigeria: a case study of Edo State. In undertaking this project work research questions were administered to both respondents and staff of the bank. From the study it was confirmed that:
a.                  The respondents were aware of the existence of community bank in Edo State.
b.                  The services offered by the bank were provision of credit facilities keeping valuables, credit deposit, mobilization.
c.                   Services, financial extension services etc problems of providing services to the respondents by the bank was services to the respondents.
d.                  The problem encountered in providing services to the respondents were poor lending policy, incompetent board and management staff, insider dealing, poor staffing and poor lend of equipment and insolvency, low capitalization etc.
e.                   The solutions to the problems were erecting healthy environment for a living organization and mobilizing discipline, providing more equipment, adherence to principle of knowing customers etc.
The following from above, recommendations below were given:
a.                  That qualified staff were employed to improve on the operation of the bank.
b.                  That the bank improves on its lending policy by making it attractive to the customers who patronize it.
c.                   That the relevant equipment needed in the bank were provided to make effective the operations of the bank.
d.                  By ensuring that there was always money for customers to withdraw or loaned whenever needed.       
TABLE OF CONTENT
CHAPTER ONE      
1.0       Introduction
1.1       Background to the study
1.2       Statement of problem
1.3       Objectives of the study
1.4       Significance of study
1.5       Research questions
1.6       Scope of the study
1.7       Limitations of the study
1.8       Definition of terms
CHAPTER TWO     
2.0              Review of related literature
2.1              Antecedent of community banking
2.2              Objectives of community banking
2.3              Community banks
2.4              Problems of community banking system
2.5              Solutions to the problems
CHAPTER THREE             
3.0              Methodology and procedure of study
3.1              Research design
3.2              Population of the study
3.3              Sampling of the study
3.4              Sample technique adopted
3.5              Instrumentation
3.6              Method of data collection
3.7              Method of data analysis
CHAPTER FOUR    
4.0              Presentation of data and discussion of results
CHAPTER FIVE     
5.0              Summary, Conclusion and Recommendation
5.1              Summary
5.2              Conclusion
5.3              Recommendations
BIBLIOGRAPHY    
QUESTIONNAIRES           
CHAPTER ONE
INTRODUCTION
1.1              BACKGROUND TO THE STUDY
In Nigeria, as in most other developing countries, the financial system consists of number of institution which include the central bank, commercial bank, federal saving, merchant and mortgage banks as well as the community banks, the stock exchange securities commission. These commercial banks carry out their day to day activities they mobilizes funds (savings), these savings are a pool of funds on which the banks on the one hand pay interest to the owners of such funds and then lend these savings or funds to investors in the form of loan, credit, overdraft and advance for the development purposes, these pay back with interest of every lending. The loans and advances constitutes the most important components of a banks asset port-folio and this is why it is in the interest of every lending institution to make sure that it does not acquire any bad or doubtful debts, even though allowances are usually made for it. The cash flow problem which are currently experienced by many businesses under the economic recession have severally reduced by the ability to service bank debts. (according to Nigeria economist 1988:24). Most clients fails to pay in interest and as a result the interest plus the principals accrues, thus making the possibility of repayment remote. There is no banking institution in the country, that is no threatened by the effect of debt defaults on their banking activity (Endeavor 1990.28). In the recent times, debt default has been one of the main setbacks experienced by commercial banks in Nigeria and for these reason the provision for bad debts have been so enormous that they attract attention from both general public and the government. Thus, debt default causes great concern to Nigeria banks.
            In the cause of their lending policies banks give loan and advances to customers who for one reason or the other re viable to pay back in such away, the bank are costly unwilling to go into litigations which are costly and time wastage so they write off such monies as bad and doubtful debts. Bad debt are simply loans, which have proven difficult or impossible to recover. The most surprising things is the length of time it takes before the banks cry out for action, this is an indication of how tolerant the system is to fraudulent borrowing. If its existence were not at stake, it can be argued that this sudden attention is the examination of bad debt default on commercial bank in Nigerian might never have arisen. Thus, this research is therefore centred on United Bank for Africa in relation to the examination of debt default on its banking activities.
From the above, this research will be carried out under an investigative analysis on what reform the federal government is enunciating in the community banking programmes in the rural community which will be followed by an identification of all allied strategies and their relevance to the revamping of the dwindled rural economy in the face of the deregulation of the Nigerian economy. It is necessary to study how the non institutional financial sector complements the current development strategies. This study also intend to evaluate the challenges inherent in the operations of the community banking.   
1.2              STATEMENT OF PROBLEMS
Despite the recognition given to grass root operators by the government through the establishment of the community banking programmes it appears that such gestures is yet to be accepted by the rural operators. And on the other hand, informal financial sector has not received any support even when it clamors for such obviously because of the emergence of the problems ridden development strategies or programmes. Some people have jointly expressed their view over the government reckless neglect of the informal financial institution. The institutions are consistently starved of funds and it limits the scale of economic activities. It can support and it is equally believed that inadequate liquidity and difficulty in identifying the structure of interest rates are some of the problems facing the institution.
Gain (1991) holds that the establishment of development programmes aimed at rejuvenating from it limbo, the rural sectors by the stampeded Babangida’s administration is nothing but a ruse to hood work and mislead the innocent, the aggrieved and the oppressed. According to Solarin, community banking is a window dressing that lack substance. The he seriously believed that the programmes were more conceptual expression existing only in the contemplation of government imagination.
1.3              PURPOSE OF STUDY
Among the objectives of this study are:
a.                   To appraise the role of community baking in the development of Nigeria economy.
b.                  To suggest ways of improving on community banking in the study Edo State.
c.                   To find out if the financial need of the rural operations are adequately catered for.
d.                  To know how the record priorities in terms of investment activities.
1.4              SIGNIFICANCE OF THE STUDY
This study will be of importance to the community banks because it will enable community banks to adjust their credit delivery system to match the environment situation and circumstance of the rural operations. The study will be useful to government and the credit seekers because it will enable government to create a new orientation and initiate measures to sanities the operations of the existing programmes and then express credit seeker to many source of short term fiancés.  Finally the study will help future researchers as in areas of seeking information.
1.5              RESEARCH QUESTIONS
This study will be guided by the following:
a.                   What are the services provided by the community bank?
b.                  What are the roles of community banks in a depressed economy?
c.                   What are the problems of community banking in the Edo State?
d.                  How does your bank facile these problems?  
1.6              SCOPE OF STUDY
The study was the role of community banking on the economy of Nigeria: a case study of Edo State. The study among other things covers the antecedent to community banking, nature and characteristics of the informal savings pattern. The study also covers the expected roles of community banks to rural development, the emerging peculiarities and the complementary of community banks with informal units.
1.7              DEFINITION OF TERMS  
Bank: It is an organization offering financial services, especially the safe keeping of money.
Banking: Banking is the business of accepting deposits and lending money to customers. It is a trade like other business concerns because it has customers which are transacts business.
Community: A community “sentiment area” with emphasis upon affective interrelationship or it is a group of any size whose member’s ahs a consciousness of living a common life and sharing common destiny.
Development: Development can be seen as a change from one state to another to the extent that the new state is different from the formal in terms of developing.