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Has Rural Banking Developed Rural Nigeria?

DE Amadasu


There is problem of rural development in Nigeria because of increasing
poverty in the rural areas where about 70% of the people live. Reducing
poverty means increasing income. Increasing income means increasing bank
loans and advances for efficient application to agricultural and industrial
activities in the rural Nigeria. Social banking or rural banking in Nigeria
should take the lead. Has this been done in Nigeria? This is the problem to
be solved by testing the hypothesis that there is no relationship between rural
banks credit and the development of rural Nigeria. Regression analysis using
data between 1982 and 2006 was utilised for the study. A major finding is
that the lending rate, inflation rate, food imports and the autonomous
contribution are anti GDP (Agriculture) though rural banks credit is
positively related to the development of rural Nigeria. The major
recommendation is therefore for policy makers to ensure that the autofactors
are reduced while the rural banks loans/advances and rural bank
branches are increased urgently to contribute more to rural transformation.