| Abstract: | This paper examined the development role of community banks in rural Nigeria by using the deposit mobilization capability and funding capacity in key sectors of the rural economy as yardsticks. By using a cluster sampling technique, it looks at the achievements of the community banking scheme initiative in terms of economic development. The scheme, established in 1991, has sustained itself and promoted rural development in the country. It is noted that communities have, for the first time, realized that they can advance their own economic fortunes. However, the scheme's performance as supporter of the agricultural sector has not been as well as expected, despite the fact that agriculture dominates Nigeria's rural economy. In view of this, non-banking activities are a welcome development since some of their approaches are proven to be knowledge enhancing and empowering for the rural population. Overall, community banks should attempt to strengthen non-banking approaches by collaborating more with self-help groups or nongovernmental organizations to be more empowering, results-oriented, and sustainable. Moreover, regulatory authorities should ensure that guidelines relate to credit application in terms of volume and sector allocation. |
