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This project is a thorough research into the impact of community banking on the economic development of Nigeria.  In carrying out the research investigation into the performance of the community banks and  the extant they have contributed in the  economic development of Nigeria especially in the concerns grass root development were identified and properly evaluated.  Also various measures adopted by the management of these community banks were identified and appraise and suggestion on how improvements can be made contribution toward the return on investments and contribution towards the economic wellbeing of the nation are achieved. To facilitate the work data were collected from both the primary and secondary sources; presented to aid test the development hypothesis on the basis of estimated population.







  • Background of the study

Ever since the introduction given by Good to man to “be fruitful and  multiply”  replenish and subdue the earth” man has alone a lot to pursue this injunction of subduing  the earth.  By this it entails among other things  the development of the world as a macro society for the overall good of man- economically politically socially and otherwise.The wheel of change has been rolling on through the entire world transforming virgin lands deserts oceans and seas to the economic advantage of man.  Nigeria was unknown then.  The first step in the British acquisition of Nigeria was the  annexation of lagos in 1861  (ONWUBIKE 1973). It  marked the first major step taken by the  British government   in the 19th century to acquire economic and political domination over the people of Nigeria.  A chattered company- the royal Niger company was administering the high land of Nigeria – North of Lokoja – on behalf of the British the British government had declared a protectorate   over areas claimed by the company in 1887.  Then on  1st  Jan. 1990  it took royal Niger company  and named it the protectorate of Northern Nigeria with laggard as its first  high commissioner.  Floral Shaw- formal colonial correspondent of the times on London who later became Lugards  wife ealled this great political unit  Nigeria in 1900.  (onwuikeo,1973)  finally the two Selecta government :  the colony and the protectorate of Northen Nigeria on 1st Jan. 1914. Lugard became its first  governor- general.  The coming into existence of Nigeria was aptly described by late sir Ahmade when be  rather solemnly said “God did not create Nigeria  the British did” (onwubiko 1973). Nigeria continued in this march toward development in every facet of  life as a new emerging nation in the   west African region and by October 1960 she was  granted  political freedom and emancipation when she was granted independence.  To crown the whole stride it  had already made she was granted a republican status in 1963.

To grapple with the attendant problem as an emerging nation and satisfy its citizenry various development  plans were launched to accelerate economic development so as to put Nigeria in the proper place among   the comity of nations.  The first development  plans was slated to run from 1962 to 1968 but  extended to 1970 on the  account of the civil war.  It witnessed the construction of the Niger Dam project as well as the development   of roads  light industries such as textile rubber and groundnut processing which used agricultural   crops ; the encouragement of agriculture in the form of  establishment of from institutions and granting of loans  (Anderson, 1976). The second development plan (1970 – 1975) experienced a lot of problem. Recovery from civil war delayed the  implementation  of some project. The funds that were anticipated were not forth coming and there was lack or technical partners needed to carry  out some aspects of the plan.  The third development plan covered a period of five years (1975 – 1980). The principle long  run objectives are to similar to those of the proceeding post-independence plans.  The objectives are to make Nigeria.

A  90%  annual  rate of growth G.D.P was assumed for the plan period and the total capital investment was to be N30 billion.  The plan strategy was to utilize the country’s  resources to develop the productive capacity of the economy.  The plan was revised upward in 1976 (Ojo, 1982)  some of the highlights of this plan were Agriculture. N1.4mbuilding of two oil   refineries at Warri and expanded.  The iron and steel  industry.  Which featured in the previous plans was to  be

established at Ajeokuta in Kogi state.  A  total of N6000m  was allocated to the industrial sector.  Development of the infrastructure also took a large slide with a total of  N4000m being allocated. More roads were  to come under the control of the federal government and a   modernization of the railways was planned.  The electricity capacity was to be extended to 1,500 meg watts with improvements also in its distribution all costing N 163m.  social service were not neglected ;   N2400m was budgeted for the arimed forces. The 4th development plan equally followed suit to run from 1981- 1985- and described equally what development is all about.  Since development is multidimensional  in definition to road thus: True development must means  “the development of man- the unfolding and realization of his creative potentials enabling him to improve his material condition and living through the   use of resource available to him.  It is a process by which man’s personality  is created organized  and disciplined – which is the moving force behind socio – economic transformation of the society.

Most community leaders especially during the colonial times saw development as more of provision colonial times saw  development as more of provision of schools health centers hospitals post offices hall,  churches mosques, good roads potable water electricity and telephone.  Ewuly (1996).  However in the post independence era, the development process came to put more emphasis on the development in the material conditions and living (of man) through the use of  came to stress production and productivity.

In spite all these development plans  experimented in the past Nigeria like other countries of the third  world has  continued to face two challenges of economic development.  The first  challenge is the basic level need to attain this need involved the problem of  harnessing the vast natural and human resource of  the country  so as to extend her national economics  muscle and thereby enable her to catch  up with  the rest of the civilized world in terms of living  standard.  (Okafor 1991) The other challenge is the need to achieve qualitative economic   growth by attaining balance socio- economic development.  National development is balanced  when it permeates all the social and geo-political strata of a nation and affects all sectors of the national  economy.  The problem of economy developments in Nigeria as in  other development countries is therefore not just that of getting the economy  to run faster than the rest of  the world economy  so as to catch up with but to get the economy to run on both legs.  Nigeria economy has manifested symptoms of non-balanced economic development in various ways. This is evidence in the near total dependence on oil the non- diversification of the export    basket the over emphasis on coerce (on banking) to the  determent of authentic (value added) manufacturing. It accounts for the litter to  near total neglect of grass root development. Fortunately Nigeria government has demonstrated unusual  resolve and taken definite moves to   grapple with the problem of non- balance development .  this underscored by the problem of non- balance development.  This  underscored by the various development projects like OFN- operation feed the nation the Agricultural  development project  (AOA)DFRRI, SAP (structural Agricultural program) which was designed primarily  to deal with fundamental economic problems generated  by years f fruitless effort at non- balance economic development. The policy component of SAP  while is relevant for this project is the impact of rural banking as it regards grassroots (economic development) through  the establishment of community banks.  The  researcher wants to find out how far these community bank have contributed at  improving the economic situation of this country  – with particular interest in ohha community bank Nig. Ltd . A  community bank means an institution licensed to provide credit banking and other financial service to a designed “catchment” area   or community.

How the ohha community bank Nig- Ltd.  Measured up to the basicterms in the definition of a community bank?  Are they operating within the scope of functions of community bank?


Community banks have been assessed as capable of unshaken the monoculture economy  of the  country by empowering the entire productive sector at the grassroots level therefore ensuring even development across the    country  community banks promote rural  development  by providing effective simple services to the people  an instrument for inculcating proper banking habits  (saving and investment ) is now in place for the rural dwellers  to work towards increasing his/ her per capita  income  and  therefore be able to contribute more effectively  toward the development of the area in which he/she lives. When idea is conceived and placed on the drawing  board it appears rosy.  But when it comes to practical implementation most of the bitterness and problem emerge.



The purpose of this research work areas follows:

  1. To find out the extent the establishment of ohha community bank helped in the economic development of Nigeria
  2. To know  if ohha community bank measured up to the standard set for the  community Bank by NBCB
  3. To know the essence of the introduction of the   community banking system.
  4. To find out the operation mechanism of collaterization bank removed the issue of collaterization of loans before any person can  enjoy any, so to achieve the desired economic   development


The scope of this study covers the impact of banking administration on the economic development of Nigeria. But in the cause of the study, the researcher encounters some constrain which limited the scope of the study;

 (a)Availability of research material: The research material available to the researcher is insufficient thereby limiting the study.

(b)Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c)Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.


To solve the research problem the investigator has asked the following question.

  1. To what extent has ohha community bank helped in economic development
  2. To what extent has ohha community bank measured up to the  standard set for the community banks by the Board for community banks?
  3. What  is / are the essence of the introduction of community banking system?


It is believed that at the completion of the study, the findings will be of great importance to the management of the banking industry; as the study seek to exposed the impact of the banking industry on the economic development of Nigeria. The study will also be useful to the central bank of Nigeria as the study seek to expatiate on the benefit of bank administration on rural communities in Nigeria. The study will also be of great benefit to researcher who intends to embark on research in similar topic as the study will serve as a reference point to the study. Finally, the study will be of great importance to academia’s, researchers, lecturers, teachers, students, and the general public as the findings will add to the pool of knowledge.



A bank is a financial institution that accepts deposits from the public and creates credit.  Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries.

Economic development

Economic development can be defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base

Banking Administration

‘Bank Administration Institute – BA’ A non-profit organization that focuses on improving banking standards (in the operations and auditing areas) while analyzing risks and promoting productivity-enhancing technology solutions. The BAI runs professional schools, conferences and individual programs


This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, objectives of the study, research questions, research hypotheses, significance of the study, scope of the study etc. Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter.     Chapter three is a research methodology covers deals on the research design and methods adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.


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