Micro finance Bank As A Catalyst For Rural Development In Enugu State. source. www.projectng.com
Abstract

system in Nigeria , intensive campaigns were organized nationwide urging community to form community Development Association or where they already exist6 in form of town union or patriotic association to register them in their local government.This research work examined the availability of tangible collateral have any position effect on the level of loans disbursement in the community. The awareness campaign organized by Microfinance bank have improved the banking habits of the people of the area. Whether loans granted to rural dweller by Microfinance bank have any positive effect on the unemployment level of the community. Whether Microfinance bank can accept self-recognition as alternative security to collateral in granting loans to the inhabitants of rural areas. Whether the incidence of loan repayment default by rural dweller have any significant effect on the level of loans of Microfinance bank. These are the areas that the researcher concentrated while carrying out this research work. The first chapter is the introductory part of the research work. This chapter also contains the background of the study, statement of problems, research Question etc. Data for the study was sourced from two main sources which include Primary and Secondary sources of data collection. Primary data: Questionnaires and oral interviews were used to collect information from the respondents. Secondary data : Journals, magazine and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables, pie-charts and percentages was used in treatment of data while chi-square was used in the research work. Based on the findings, conclusions were drawn and recommendations were also made in the last chapter of this work which is the fifth chapter.

INTRODUCTION


1.1 BACKGROUND OF THE STUDY

Long before the inception of Microfinance banking system in Nigeria , intensive campaigns were organized nationwide urging community to form community Development Association [CDA] or where they already exist6 in form of town union or patriotic association to register them in their local government. This was to create an avenue for which they could more effect t lively participate in rural development programmes at grassroots .Development association was found and registered as at 31st December 1992.

It is pertinent to mention that government had before this time established some development agency intended to providing grassroots’ development. These include National Directorate for Employment [NDE] Better life programmed of Rural Dweller [BLPRD] Rural Banking ,people’s Bank and Directorate of food , road and Rural infrastructure [DEFRRI] whose primary task was to a identify , involve and support viable local community organization in the mobilization of the rural population for sustained rural development activities bearing in the mind the need of promoting greater participation and economic self- reliance on rural development “

On the basis of this and other functions defined in the Decree 4 of the 1987, as stressed by mabogunje, the directorate fell into three broad areas as

1. Community organization and social mobilization

2. Infrastructural Development

3. Promotion of productive activities.

The idea of Microfinance banking was made known to the public during January 1st 1990 budget speech by the president and commander of chief the Armed forces, General Ibrahhim Alamosa Babangida, in that speech he clearly spelt out what the government has in mind as follows.

The adjustment subsidy levels of domestic price of petroleum product have been estimated millions is 1990 fiscal year.

Government decided that the sum be put back into strengthening its programme of grass-root economic development.

Accordingly, the sun of N453 million will accrue to special account with the central bank to strengthening the people’s bank.

Maboguje defined Microfinance bank as a self sustaining financial institution, owned and managed by providing credit, deposit banking and other financial services to its members largely on the basis of their self recognition and credit worthiness”.

Based on the foregoing, microfinance banks are primarily set up to promote productive activities in the rural areas. Specifically, they ar5e meant to facilitate the programmes of the directorate of food, road rural infrastructure by providing easy access to credit for rural producers.

National Network of Microfinance banks are intended to greatly strengthen the massive programmes of government in rural development. To day’s over 1,110 Microfinance banks are found to have been established throughout the country with Alheri community Microfinance bank , Tudun Wada in Kadauna State as the first to be commissioned on 31st December, 1990.

The shift of emphasis to rural development is a matter of necessity at this present state of our development. It is important to state here that over 75% o the country’s resources endowment abounds in the rural areas. Again, part of our experiences in rural development has clearly shown of rural that effort at expanding economic base of scarcity of, and restricting access to loan able fund.

In addressing this problem, pervious government in their economic policies had relied exclusive on development banking and rural branch banking of the orthodox banks. However, it was observed that the sophisticated mode of operation of the conventional bank, their legalistic insistence on collateral had rendered them incapable of dealing with the unsophisticated rural dweller and lower strata of our society.

Jags and Nkom stressed that the introduction of Microfinance bank was itself motivated b y the failure of previous attempts at extending credit to the rural producer. It is therefore, in firm belief and commitment to rural development that every Nigerian who is engaged in productive activities must have access to loan able fund regardless of Read More


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http://www.scharticles.com/diversity-of-incentives-in-rural-development-as-a-social-responsibility-of-organizations/