...THE IMPACT OF RURAL BANKING ON RURAL FARMERS IN UGANDA. CASE STUDY OF KABALE DISTRICT. BY NAMARA MARTHA 10/U/15158/EVE 210006079 A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF STATISTICS AND APPLIED ECONOMICS FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF ACTUARIAL SCIENCE DEGREE OF MAKERERE UNIVERSITY. TABLE OF CONTENTS Contents CHAPTER ONE 4 INTRODUCTION 4 1.0 INTRODUCTION 4 1.1 BACKGROUND TO THE STUDY 4 1.2 STATEMENT OF THE PROBLEM 4 1.3 THE AIM OF THE STUDY. 5 1.4 OBJECTIVES OF THE STUDY 5 1.5 RESEARCH HYPOTHESIS 5 1.6 RESEARCH QUESTIONS 5 1.7 LIMITATION OF THE STUDY 6 1.8 ORGANIZATION OF STUDY 6 1.9 SIGNIFICANCE OF THE STUDY 6 CHAPTER TWO 7 2.0 LITERATURE REVIEW 7 2.1 STRUCTURE AND PERFORMANCE OF RURAL AND MICRO FINANCE INDUSTRY 7 2.2.0 RURAL AND COMMUNITY BANKS (RCBS) 9 2.2.1 SAVINGS & LOANS COMPANIES 10 2.3 NON-GOVERNMENTAL AND COMMUNITY-BASED ORGANIZATIONS 10 2.4 INFORMAL FINANCE 11 2.4.1 MONEYLENDERS 11 2.4.2 TRADERS 12 2.5 GOVERNMENT CREDIT PROGRAMS 12 2.5.1 INTEREST RATES 13 2.5.2 SECURITY 13 2.5.3 THE NEED FOR THE RURAL CREDIT...
Words: 4723 - Pages: 19
...PROPOSAL ON IMPACT OF RURAL BANKING ON RURAL FARMERS IN BANGLADESH INTRODUCTION: Bangladesh is an agro-based country, essentially are endeavoring for rapid development of the country. More or less 80 percent people directly or in directly depend on agriculture for their occupation .But it is a matter of great sorrow that farmers of our country get less facility in agricultural inputs especially agricultural credit. Due to the lack of credit at proper time they cannot produce crops at proper efficiency. So the responsibility of rural banks needs to be increased. Because If current agricultural trends continue, by the year 2020 in Bangladesh food shortage will increase many times, .The lower calorie intake could lead to poverty, malnutrition and hunger. In an attempt to alleviate some of these potential problems, several institutional and non-institutional sources of rural credit have been made available to Africans. It is hoped that, in the long term, credit will enable the poor to invest in agricultural and non-agricultural productive assets, to adopt new technologies and farming methods, and to minimize environmental degradation. Bangladesh, like other developing countries, has traditionally experienced low productivity, low income levels, low domestic savings, unemployment, and malnutrition. The Bangladesh government, through the Bangladesh Bank , established Rural Banks to channel credit to productive rural ventures and promote rural development. Rural development is...
Words: 3976 - Pages: 16
...Impact of E-Banking on Capital Bank and local area banking industry in India Coursework- Technology in Business and Society Shahbaz Singh Samra - B022337 Executive Summary The task commissioned was to assess the application of a technology to support organizational change. This report concentrates on how electronic banking (e-banking) has contributed to Capital Local Area Bank (CLAB) and the local area banking industry in India. Focus lies upon CLAB’s operations and how the bank incorporated e-banking to revolutionize and set standards for transparent and efficient banking in the state of Punjab. E-Banking gives strategic value to the organization and the industry because it adds a new dimension to the bank to offer its products and services. It gives the organization a comparative advantage over its rivals. However, local area banks might have to suffer loss of business done through their physical branches especially in urban and more developed areas. This, however, would be a positive for CLAB as the overall business generated would be higher and it gives its customers a facility that is yet to be provided by its competitors. E-Banking t is very cost effective for the bank. A bank, in order to expand efficiently, would be better off investing in e-banking rather than expanding its customer outreach through increasing the number of physical branches. Inevitably, e-banking does have some issues and challenges than an organization would have to overcome to...
Words: 3369 - Pages: 14
...THE IMPACT OF GHANA RURAL BANK COMPUTERIASATION AND INTERCONNECTIVITY PROJECT ON THE PROFITABILITY OF RURAL BANKS A CASE OF SOUTH AKIM RURAL BANK LIMITED INTRODUCTION Background Statement It can be said universally that the rate of change and expansion that organisations are striving to achieve has been ambitious. The rural banking sector is no exception. Profitability of banks has improved tremendously. Current trends show that banking is more profitable through the use of technology. The rural banking concept was introduced to bridge the rural urban gap of financial transaction (Addo 1998). Since their inception the rural banks have been at the fore front of developing proper innovative financial product and modifying their operations to suit the specific needs of the rural farmer, the underserved micro enterprise and other low income operatives of the rural economy (Obeng 2009, Owusu Ansah1999) The objective of rural banks include the following, to provide basic financial services to the rural folks .To play a financial intermediary role by mobilizing financial resources from within their area of operation and channelling such funds to support viable ventures and thus invariably improve the socio-economic well-being of the people in the communities they serve, to inculcate banking culture and attitude into the rural folks in order to stem the tide of high volume of liquidity circulating outside the Ghanaian banking system...
Words: 9206 - Pages: 37
...Questions, Significance of the study, Scope and Limitation(s), Definition of terms and the Organization of the study or Chapters 1.1 Background of the Study The Rural Banking concept was introduced in the mid-1970s. The motives were to mobilize savings from the rural areas and in turn make institutional credit available to the Rural Economy. The need for improved financial intermediation in the rural economy became paramount because of the non-availability of formal institutions and the fact that most rural dwellers are engaged in agriculture. Agriculture is the mainstay of the Ghanaian economy and until recently the largest contributor to GDP. (Yahiya, research Dept. of BOG, 2013) Despite the potential resources existing in the rural areas, farmers and small entrepreneurs lack the required institutional credit to play the expected meaningful role in the Economy. The peasant farmer had to rely on informal operators such as Mobile Bankers locally known as Susu Collectors, and self-help groups and money lenders for his credit needs. These creditors charge exorbitant interest rates which, in most cases, aggravates the poverty state of the borrowers. The bank of Ghana, in a bid to take care of the credit and other financial needs of the rural people, therefore encouraged Commercial Banks to expand their rural networks. The Agricultural Development Bank, for example, which was originally a unit of the Bank of Ghana, was established in 1965 with the aim of reaching the small-scale...
Words: 15274 - Pages: 62
...Will Reforms Enable Outreach? M-CRIL Review of Rural Banking in India: Working Paper 1 Micro-Credit Ratings International Limited 602 Pacific Square, 32nd Milestone NH8, Gurgaon 122 001 INDIA Telephone: +91 124 230 9497, 230 9707, 405 0739, 426 8707; Fax: +91 124 230 9520 e-mail: contact@m-cril.com ; website: www.m-cril.com Study Sponsored by Swiss Agency for Development and Cooperation Micro-Credit Ratings International Limited Table of Contents Section Background Executive Summary 1 2 3 4 Introduction The Importance of Rural Banks Recent Performance of the Rural Banking System Reforms and the Rural Banks 4.1 A huge effort to reform the cooperative system 4.2 Sensible proposals for reorienting the Regional Rural Banks but… 5 Will Reforms Enable Inclusion? 5.1 Cooperative reform – is it good money after bad? 5.2 RRB reform – has the inclusion objective been sidelined? 6 Conclusion Page v vii 1 3 7 8 8 12 15 15 17 18 M-CRIL Review of Rural Banking in India Background This study follows from the discussion of issues in the performance of Regional Rural Banks (RRBs) written by Sanjay Sinha, Managing Director, M-CRIL and published in The Economic Times (newspaper) on 17 March 2007. In relation to financial inclusion, many of the issues raised there affect the performance of cooperative banks as well as the RRBs. These issues include • The effect of government ownership of RRBs on their ability to operate efficiently and effectively to fulfil the financial inclusion...
Words: 5545 - Pages: 23
...RURAL BANKING IN UGANDA: IT’S IMPACT ON RURAL FARMERS (A CASE OF UNYAMA) BY HENRY EGYEYU Reg N0: 07/U/456/BAK/PS MAY, 2012 DECLARATION I Henry Egyeyu, hereby declare that this research report is my original work and to the best of my knowledge, has never been published and submitted for the award of any degree in any University or Institution before. Sign ……………………………………………….. Date ……………………………………………... Henry Egyeyu Reg No: 07/U/456/BAK/PS APPROVAL This research papers under the topic “Rural Banking in Uganda: It’s Impact on Rural Farmers” Has been under my supervision and is now ready for submission with my approval. Sign: ……………………………………… Date: …………………………………. Mr. Ambrose Eger Supervisor DEDICATION To the memory of my late grandfather Daniel Egyeyu Whose love & enthusiasm for academia first kindled mine? ACKNOWLEDGEMENT Achievement often sets off a chain reaction. Those who earn awards in various disciplines in their careers inspire us in turn to strive and excel with hard work and deeds of succession. That has been true of the process of writing this dissertation I am grateful for the motivation of Geoffrey Epolu at guluuniversity@AR.com whose question, “Do you want to graduate?” first got me started. Paul Onyango Delewa, lecturer at Gulu University, read the first script and encouraged me to go on with the dissertation. Ambrose Eger as he had always done before, made sure that what I researched communicated my...
Words: 10447 - Pages: 42
...Republic Act No. 10574 On May 24, 2013 President Aquino signed into law Republic Act No. 10574. RA 10574 opens Philippine rural banks up to 60 percent foreign ownership. The law states that, “Non-Filipino citizens may own, acquire or purchase up to sixty percent (60%) of the voting stocks in a rural bank. The percentage of foreign-owned voting stocks shall be determined by the citizenship of the individual or corporate stockholders of the rural bank.” In allowing the assistance of foreign investments in Philippine rural banks, said banks are put in a better financial position to serve its clients through upgraded banking services. The Republic Act No. 10574 – which amends “The Rural Bank Act of 1992” (Republic Act No. 7353) – provides rural banks with the financial capacity to better service its clients in the Philippine countryside, i.e. farmers, fishermen, etc. Subsequently, with this law rural banks now have a better chance of acquiring more resources and funds for expansion and making their financial services more accessible to its clients. When it comes down to the bottom line, in order to have a successful business – be it a bank, a restaurant, or a retail shop – having a sufficient capital is indeed extremely vital. In essence, that is what a bank is, a business. They provide a service, and in return are given payments for the service that they have provided. In order for a bank – regardless of how big or small – to make money, it needs to have money to begin...
Words: 1020 - Pages: 5
...ABSTRACT Agency banking is a new banking concept introduced in Tanzania by the Bank of Tanzania (BOT). The main objective is to increase financial services outreach and to promote financial inclusion to the un-banked and under-banked population without risking the safety and soundness of the banking system. The concept is also geared towards encouraging financial institutions to use agents in the provision of banking services so as to reduce the cost of financial services and to foster financial inclusion, reach and depth. Commercial Banks worldwide offer similar kinds of services, but they could provide differences in terms of service quality. This paper analyzes past studies regarding service quality improvement in the agency banking sector. The continuing trend to a model of service quality improvement, from personnel counter services to electronic services, will be demonstrated. Improved service quality should be adopted to maintain the core competence and this research will contribute towards knowledge and background for banks to apply these findings to better shape and focus their positions in the market and also to provide service quality to customers through the agency banking concept. Introduction A banking agent is a retail or postal outlet contracted by a financial institution or a mobile network operator to process clients’ transactions. Rather than a branch teller, it is the owner or an employee of the retail outlet who conducts the transaction and lets clients...
Words: 1548 - Pages: 7
...contribute substantially to a wide range of developmental objectives. However, the full potential of the micro business in the development process have not been realized owing to numerous bottlenecks. In the light of this, the Central Bank of Nigeria (CBN) as part of its reform agenda, initiated Micro Finance Banks, a policy initiative aimed at bringing credit to the door step of the poor who do not have such access under the conventional financial system. The thrust of this project is to articulate the prospects of the micro finance banks towards boosting the performance thereby reducing the level of poverty and enhancing employment generation. Micro finance banking institution were conceived and came into been in December 2007. It was packaged to address the issue of cultivating appropriate modern banking habits in the rural area, through the social local institution such as community social clubs and other individuals who are encouraged to be co-owner of the bank...
Words: 952 - Pages: 4
...credit and insurance services extended to socially and economically disadvantaged segments of society. It is emerging as a powerful tool for poverty alleviation in India. The prospect of Micro-Finance is dominated by SHGs (Self Help Groups) - Banks linkage Program. Its main aim is to provide a cost effective mechanism for providing financial services to the poor. To understand the transformation experiences better, the issues that trigger transformation were identified viz.: size, diversity of services, financial sustainability and focus. It is argued that the transformation experiences in India are not large in number. However, I found that there are three forms of organizations that seem to be popular in the microfinance sector – the Non-Banking Finance Companies, the Banks– both Local Area Banks and Urban Co-operative Banks and the Co-operatives. The concept of Microfinance is analysed by undertaking a...
Words: 9136 - Pages: 37
...of India's banking sector that RBI is giving out differentiated licences for specific activities. It has given in-principle’ licence to 11 entities to start Payment banks business. RBI is expected to come out with a second set of such licences — for small finance banks — and 10 micro lenders were given in-principle approval to set up small banks to advance loans primarily to the unbanked, small businesses and farmers, micro and small industries and unorganized sector entities which do not have access to finance from the larger banks. The idea behind the payment bank is further financial inclusion by providing small savings accounts used by payments and remittance to migrant workforce, low income households, small businesses, at lowest costs. The payment banks, as the concept is more advanced and visionary, moreover having less risks in activities, will lead to rising competitive intensity (higher savings interest rates and service standards) in the banking system, particularly for PSU banks in non-urban centres. It could be uneconomical for traditional banks to open branches in every village but the mobile phones coverage is a promising low-cost platform for quickly taking basic banking services to every rural citizen. The impact on private sector banks will be minimal because they have already made strong investments in technology. But there could be an impact on small and medium public sector banks as incremental deposit growth and market share will see some impact from payment...
Words: 2063 - Pages: 9
...• " A STUDY OF THE IMPACT OF HUMAN RESOURCE PRACTICES IN REGIONAL RURAL BANK OF MP II (A) INTRODUCTION OF HRD According to Economic Theory, the factors of production are land, labour, capital, organization and enterprise to produce and distribute goods and services. These five factors can be further grouped into two broad categories, (i) land and capital and (ii) labour, organization and enterprise. The former category is passive in nature while the latter one is active. The inputs of this category may be largely termed as human resources working in the form of entrepreneurs, managers and workers. No amount of production of any good or service is possible in their absence. Even with the given factor - inputs (factors of production) of the first category, the magnitude of goods and services and their quality depend on the quality of such human resources. In the present day society, the need for well developed and qualified human resources is being felt very profoundly to successfully face cut-throat competition. This is because the modern commercial and industrial scenario is characterized by mega-sized organizations, global competitions, innovative and newer wide variety of goods and services and ever changing technology. In this situation, the development of human resources has assumed more significance so as to understand and use ever - changing technology and to do the job effectively and efficiently, eventually leading to...
Words: 4801 - Pages: 20
...Introduction The introduction of microfinance banks in Nigeria is the inability of Nigerian Deposit Money Banks to provide sufficient financial service to the rural poor. Microfinance banks have taken up the challenges of the gap created by the Nigerian Deposit Money Banks. Microfinance banks can be seen as an economic growth method intended to advantage the low income part of a given country like Nigeria, both rural poor and urban poor. Since the advent of microfinance banking in Bangladesh in the mid 1970’s, several countries have copied this financing model. The Nigerian governments over the years have had to grapple with poverty and unemployment. The realization that many of these poor and/or unemployed persons are not without skills, ideas and willingness to work, must have propelled the government to make finance accessible to them The seeming popularity of this model among developing countries is predicated on poverty reduction prospect it offers. The Nigerian government cued into this popular thinking in 2005 when it inaugurated the microfinance banking scheme. This was founded to provide finance to economically active poor excluded from financing by conventional banks, provide employment, engender rural development and reduce poverty. This paper theoretically examines the impact of this institutions to Nigeria as a country. International Journal of Finance and Accounting Concept of Microfinance Microfinance...
Words: 2607 - Pages: 11
...under FIF and 183.82 crore under FITF. Support was extended for setting up of Financial Literacy and Credit Counseling Centres (FLCCs) to Lead Banks (111 FLCCs), capacity building programmes by commercial banks and (Regional Rural Banks)RRBs and Financial Literacy awareness camps by RRBs, under FIF. Under FITF, support was extended for implementation of Core Banking Solution (CBS) by weak RRBs (26 out of 28) and Information & Communication Technology (ICT) solution by RRBs (52 out of 82). Financial Inclusion During the year 2012-13, the disbursements under Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) were 33.31 crore and 17.14 crore respectively. With this, the cumulative disbursement since inception touched a level of 69.77 crore under FIF and 201.30 crore under FITF. Support was extended for setting up of Financial Literacy and Credit Counseling Centers (FLCCs) to Lead Banks in 256 excluded districts and 10 disturbed districts, capacity building programmes by commercial banks and RRBs and Financial Literacy awareness camps by RRBs, under FIF. Under FITF, support was extended for implementation of Core Banking Solution (CBS) by weak RRBs and Information & Communication Technology (ICT) solution by RRBs. 2013-14(impact seen) Financial inclusion continued to be an area of extreme importance for NABARD. 15 Lakh RuPay Debit and 7 Lakh RuPay Kisan Cards were issued by RRBs while 6 Cooperative Banks began issuing RuPay Kisan...
Words: 3086 - Pages: 13