INTRODUCTION

This introduction is many concerned with the effort of community banks in rural development which is backwards due to certain problems that hinder them, such as infrastructural facilities, shortage of manpower, problem of security and so on.

1.1    BACKGROUND OF THE STUDY

The evolution of community banks in Nigeria can be traced to the 1990 budget when the president formally announced the introduction of the programme. It was men for recognition of  the peculiarities of the rural communities and the need to monetize and integrate the rural economics into the banking system.

Meanwhile the word community bank, it can be seen as a self sustaining financial  institution owned and managed as a community of group  of communities for the purpose of crewing deposit, providing credit  facilities and other banking a financial services to its members largely on the basis of their self recognition and credit worthness.

Despite that, in July 1990, the  community banks implementation committee (CBIC) was set to work out the modalities  for the establishment of community banks.  Having produced all the necessary documents for the establishment of community banks, the CBIC commissioned a number of  community banks to operate before the setting up and inauguration of National Board for Community Banks (NBCB) on July 16, 1991.  The NBCB  with more executive powers and the responsibility for the overall supervision of community banks, placed the CBIC.  The first community bank commenced operation in December, 1990.

A bank  licenced under community bank decree shall accept deposit of all type from people including savings and time savings.  To receive or  collect money on behalf of  customers.  Providing banking services to people as in giving out loans and after financial facilities.

1.2    STATEMENT OF THE PROBLEM

The  statement of the problem were stated as follows.

1.           How  loan can be made available to rural drivellers or borrowers?

2.           how can rural banking system be improved to help in rural development?

3.           how to foster community ownership and use of economic assets?

4.           how can loan secured other then asking for tangible security like collateral ?

1.3    OBJECTIVE OF THE STUDY

The objectives makes the researcher to know the role of community banks in rural development.  It reveals the following objectives.

1.           The promotion of rural development by providing financial and banking services to communities inadequately supplied with such services.