The Problems Facing The Establishment Of Banks In Rural Areas (a Case Study Of Some Selected Local Government Areas Of Enugu State)

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Title page                                                                       II

Approval page                                                               III

Dedication                                                                     IV

Acknowledgement                                                         V

Acknowledgement                                                         VI




Background of the study                                                         1

Statement of problem                                                    4

Objectives of the study                                                 6

Scope of the study                                                                   7

Statement of hypothesis                                                          8

Significance of the study                                                         9

Definition of terms                                                         10




Review of relation literature                                          12

Literature review                                                            12

Origin of Nigeria banking system                                  16

Banks defined                                                                18

Types of banks                                                              19

Differences between central banks and other banks       26

Differences between commercial banks and merchant banks 28

Commercial banks and rural banking development                          29

Financial institutions and rural development                          31

Rural banking scheme and relationship Between peoples bank, community, family support towards rural development     34



Research methodology                                                   37

Sources of data                                                              37

Population of study                                                       38

Sample size determinant                                                          39

Research instrument used                                              41

Origin of data                                                                42



Tool of statistical analysis                                             44

Testing of hypothesis                                                    55



Summary of findings, recommendation and conclusions

Summary of finding                                                       62

Recommendation                                                           64

Conclusion                                                                     67

Bibliography                                                                  70

Appendix I                                                                              74

Appendix II                                                                             77





          Banking transactions in some selected local government in Enugu such as Udi, Ezeagu Udoji is not new to us as we have been practicing this system for over thirty years after independence. However it is on this background that two systems of operations were adopted for effectiveness and efficiency of the product management in various banks. In the past we use to have an orthodox banking process whereby the banker relaxes on this sit waiting for customers to bring business. This type of banker is looked at as somebody with rigid ideas about bankable projects and which in turn retards the smooth flow of banking operations. Another type of banking process adopted as conventional is the unorthodox system whereby the banker is evolved in looking for customers.

          Because they want to maximize profit, the banks employ all possible marketing promotional strategies in order to survive, hence competitors has come into play and thereby creating innovation and business acumen. Knight Lester B. (1970: 7) status of banking marketing Washington D. C. American Bankers Association states that banks primarily especially commercial banks are engage in business of collection, payment and depository functions as well as credit management.

          According to Kotler (1980: 4) stated that the survival of any bank depends on the manner it functions and therefore it has to depend on the market place for its profitability and environments of the economy which it serves. It is worthy to mention that the ability of any business to serve and retain its customers depends mostly on the quality and the effectiveness of the product management it offers. The quality of services provided by the any organisation is better judged in terms of it’s ability to bestow the customer’s with the desired satisfaction. In this regard characteristics such as reliability, standardization, availability and other desired attributes associated with service combine to determine the effectiveness of the product management in the marketing of banks services in the three local government areas.

          Martins (1979: 12) confirmed that the image commercial bank has is important because it determines the customers patronage of bank.

          According to advertisers watchdog (1983: 7) awareness creation strategy has been limited to advertisement which does no more than informing the customers about the services they offer and the address of their location. All the claims about efficient courteous and speedy services are false and advertising in banking industries can only become a reality when services the bankers render is equated to match the claims they make I the advertisement. According to Azikiwe (1943: 16) expressed his annoyance and disappointment over the treatment meted on him from a bank staff in Lagos. The story is still the same every where even after the days of the white men. Loans are still granted guarding to customers and if granted, it is alleged that the managers demand personal cuts, long queues, man-know-man etc.

          Banking habit among the people is still very low in sipte of huge profits recorded by banks annually, according to Engu and Warsaw (1979: 10) indicated that there is a ray of hope and government rural banking programme if well planned, coordinated and pursued vigorously will help to increase the banking habit of our populace, increase efficiency and effectiveness of it product management”. There w ill also be an increase competition among the banks for customers. As at the end of March 1985, there were thirty two commercial banks, operating Udi, Ezeagu and Udoji witu a total of one thousand one hundred and fifty nine (1,159) brand network. By share volume, the commercial banks are the most dominant and by December 1980, they had a total capitalization of N16,340.50 millions.

          The competition among banks would center on non-price lines since the Central Bank controls the interest, the aggregate among to be lent to some categories of customers, the sector that more funds should be decided to what should be accepted as security for the loans and especially the type of business that banks should go into. How banks attracts serve and retain customers is left for to decide. All these put together including deposits, loans and advances make for effective product management.



          The business of banking entails the collection and transmission of funds from the saving surplus to the saving deficit economic units. Thus banks act as the mobilize of funds to all sectors of the economy. Commercial banks have growing from about seven in 1952 to thirty two by March 1985 with 1159 branch network. But the industry has continuously bene under attack by main observers especially marketing critics for failure to utilize fully the advantages of modern marketing principles in operating their banking business for better achievement of co-operate objectives and goals. Unfortunately, product management is the most criticized of all banking practices.

          Thus the poor product management practices of the banks have resulted into sense of complaints of dissatisfaction among customers about the quality of services offered. To them services are inadequate and poorly rendered. Beside most customers and potential customers are not fully aware of the bank services.

          The problems to be addressed in this study are: the customers have equally criticized the charges of the bank and varsity of services offered by this bank.

          The importance of the industrials to the economy of the country need met to be over – emphasis but yet they are found writing in optimum satisfaction of it’s numerous customers. In view of the importance of this industry in the economy, the researchers seek to evaluate the effectiveness of the product management in this industry for increased performance.



          The objective of this study is to determine the effectiveness of product management as adopted by 1st Bank in the marketing of banking services in Udi, Ezeagu and Udoji Local Government Area. At the end of this research, it is hoped that this exercise will assist to provide the management with relevant information as an aid towards effective marketing of  its services.

          This research work seek to:

1)                To determine the length and quality of service being afforded by first bank limited to its customers.

2)                To determine whether the attitude of the bank staff affects the customers patronage of the bank

3)                To find out whether writing time and armchair posture adopted by the banks affects the quality of services they render to customers.         

4)                To demonstrate the importance of applying marketing, principles and practices and determine if the concept of man-know-man affect the bank loan and advances.

5)                To find out if there is any effect of non-availability first banking services in the rural areas and effect of proximately on customers patronage.

6)                To obtain any information which many are relevant to the management in the planning and executives of promotional decision for effectiveness and efficiency.   



          This study is limited to first bank in 9th Mile corner Ngwo and also customers of the bank within Udi, Ezeagu, Udoji metropolis.



1)      Ho:    The quality of services offered by the first bank do not lead to customer patronage.

Hi:     The quality of services offered by the first bank lead to customer patronage.

2)      Ho:    The First bank changes does not lead to increase customer’s


          Hi:     The First bank changes does to increase customer’s patronage.

3)      Ho:    The effectiveness product management of the first bank does

not leads to its availability.

          Hi:     The effectiveness product management of the first bank leads to

its availability. 

4)      Ho:    The promotional activities of the first bank impact negatively

on customer’s awareness of he services.

          Hi:     The promotional activities of the first bank impact positively 

on customer’s awareness of he services.



          The importance of this study is that after looking into the effectiveness product management of the First bank in marketing their services, one will be a position to see whether the quality of services rendered by First bank has influence on the customers. It will help us to find out whether the attitude of the bank staff affects the customer’s patronage. This study will also help us to find out whether armchair alleviate whether promotional problems the bank may have been encountering in marketing of their services.      

          Finally, it is hoped that the findings of this study will be of immense help to the banking industries as a whole and first bank Ltd in particular in that it will attempt to highlight areas of deficiency with a view to helping management improving its services and our recommendation if implemented would help the bank to improve it’s operations and profit figures.




Promotion: Promotion has been defined by American Marketing Association as a strategy for stimulating marketing demand and gaining competitive edge by informing, persuading and services and identified audience.  

Strategy: Strategy refers to the planning and adjustment of efforts to attain a specific objectives. Strategy also encompassed act of conducting a campaign and maneuvering things.

Marketing: According to Kotler, marketing is human activity directed as satisfying needs and want through exchange process.          

Services: These are separated indefinable activities, which provide wants satisfaction when marketed to consumers/industrial users and which are not necessary tied to the sale of a product or another services. J. M. Rathmell, Journal of Marketing, October 1966, 33.   

Banking: The banking ordinances of 1952 defined banking business as the business of receiving from the public on current account, money which is to be payable on demand by cheques and of making advances to the customer?

Banker: A banker is a dealer in debt. It is also any body or body persons whether in cooperated or not that carry on business of banking.

Customer: There is no statutory definition of customer. The relationship arrives when a person or group of persons, society, firm customer, which the bank normally accepts customer also means one accustomed to frequent a certain place of business or a buyer.  

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The Problems Facing The Establishment Of Banks In Rural Areas