PROBLEMS AND PROSPECTS OF COMMUNITY BANKS IN THE RURAL DEVELOPMENT OF NIGERIA

The community bank is a financial institution established to carter to the savings and credit needs of small – scale producers throughout the country. Thus, the institution represents the coalescence and modernization of traditional institutions with which most Nigerians are very familiar with, the rotating savings and credit institutions known as “isusu” and the other town union or community development association. It was clear that inspite of government policy such as the agricultural credit quarantee scheme, conventional commercial banks and even development banking institutions face serious constraints in attending to the credit needs of millions of small producers in which most of whom have no collateral to put down on security.
The purpose of the study in this research includes:
a. To evaluate the role of Ogui Community Bank in rural development.
b. To investigate the problems facing the community banking system with special emphasis on community bank.
c. To make recommendations for the improvement of community banking system represented by Ogui Community Bank.
The rationale of the study is aimed at helping researchers to evaluate the role of Ogui Community Bank in rural development. Thus, they enlighten the community on the effective use of credit and other banking services so as to enhance individual, collective and community production and development. It will help them perform non – banking functions that promote grassroots development  such as supporting individual, co-operatives and group formation activities, assisting clients in marketing of agricultural, rural, industrial and other products. Thus, they provide financial and other extension services to clients and other community members.
When this project is completed, it will help researchers to work further on areas of development open to community banks. It will also assist customers of the bank to know the services provided by the bank. Ogui Community Bank Ltd. Could also use it to their own advantage especially with regard to areas where they are lacking. This study will also help the Community Bank explore other alternatives to improving their services. It will also remind the bank whether they have achieved their mandate.
The historical development of the banking industry in Nigeria shows the initial exclusion of the generality of rural community in the provision of banking services. Government has in those days made several but less successful efforts to encourage the spread of banking services to the rural areas.