APPRAISAL OF THE ROLE OF COMMUNITY BANK IN A VIRILE ECONOMY: A CASE STUDY OF EDO STATE. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
ABSTRACT
This project work is about the role of community banking in a virile economy using Edo State as a case study. In undertaking this project work research questions were administered to both respondents and staff of the bank. From the study it was confirmed that: The respondents were aware of the existence of community banks in Edo State. The services offered by the bank were provision of credit facilities keeping valuables, credit deposit, mobilization. Services, financial extension services etc problems of providing services to the respondents by the banks were services to the respondents. 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. 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. And based on the above, the following recommendations were made: That qualified staff were employed to improve on the operation of the bank. That the bank improves on its lending policy by making it attractive to the customers who patronize it. That the relevant equipment needed in the banks were provided to make effective the operations of the bank. By ensuring that there was always money for customers to withdraw or loaned whenever needed.
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 savings, 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 bank 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 problems which are currently experienced by many businesses under the economic recession have severally reduced by the ability to service bank debts. Most clients fail 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 (Banjo, 2002). In the recent times, debt default has been one of the main setbacks experienced by commercial banks in Nigeria and for these reasons 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.
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