CHAPTER ONE

1.0      INTRODUCTION

1.1      BACKGROUND OF STUDY

This project work has a basis on the identification of the roles of community banking system in promotion of rural development in Nigeria.

The community banking system was launched with the opening of Alheri community bank Kaduna by then president on 31st December 1990 within three years, about 1991 community banks had commended operation nation wide. Today there are over 1000 Community banks in operation throughout the country. The government assistance in this regard, apart from helping to incorporate and license the banks and train their staff consists largely provided them with matching loans to aid them through the initial teething period.

Community bank is the latest arrival in the banking sector. The decision to come up with a community bank was promulgated in the 1990 budget speech by then president Ibrahim Babangida. However, the program actually took in December 1990 when the first licensed community bank stated operation in Alhen, Local government area of Kaduna state to speed up the scheme, a president committee called “Community banks implementation committee” was set up. This was later replaced by the National Board for community bank, which is under the presidency.

The board is legally backed by the community bank decree of 1992 and its charged with the responsibility of supervision and regulated or community Banks.

Consequently the effectiveness effort of the board, community banks were shaped to become very deposit banking and financial services to its grass root level.