Evaluation Of Nigerian Community Banks (1992 – 2004)

Abstract

The positive relationship between bank credit and economic development has long been recognized by governments. Consequent upon this, Nigerian government has long promoted policies that would liberalize credits, particularly to the rural populace. Such policies include rural banking programme and Peoples Bank of Nigeria. The apparent inability of these policies to achieve desired goals led to the establishment of community banks. This paper evaluates community banking in Nigeria and found that because of inadequate capital structure, the banks gave nearly half of their credit facilities to commerce sub sector that did not significantly contribute to economic development. It is recommended that, though conversion to micro-finance banks would help other shortcomings like incompetent staffing and corruption should be looked into.

Keywords: Community Banking, Economic Development, Rural Banking, Credit Facilities

JORIND Vol. 6 (1) 2008: pp. 14-14