CHAPTER ONE
1.0
INTRODUCTION
1.1 Background of the Study
Globally, banks in developing countries are expected
to play vital and effective roles in financing their economic projects and activities
as their contribution in ensuring sustainable economic growth. Theoretical discussions about the importance
of credit development and the role that the banking industry plays in economic
growth have occupied a key position in the literature of development
finance. >>> Download Here!
Banks are traditionally defined as financial
intermediaries that accept deposits andchannel these deposits into lending
activities (Agboola, 2003).A bank
is a financial institution that accepts deposits
from the public and creates credit
(Hoggson, 2006). Lending activities can be performed either directly or
indirectly through capital markets. Due to their
importance in the financial stability of a country, banks are highly regulated
in most countries. Most nations have institutionalized a system known as fractional reserve banking
under which banks hold liquid assets equal to only a portion of their current
liabilities (Hoggson, 2006).
Banking desert
is an area with inadequate banking services. Especially vulnerable to the
issues associated with banking deserts are low-income residents, students and
the elderly. If basic financial services are unavailable, residents become
"vulnerable to predatory lenders and pricey check cashers"(Watson, 2014).During
the transition from high/secondary school to college or university, financial
responsibility becomes increasingly important (Rose, 2009). Tuition, living
costs and other college expenses must be calculated and budgeted. Opening a
checking account before the big move can make life a little easier.
College/university
is a time when you learn to do more with less. People who learn to manage a
bank account when they have limited funds available are more likely to manage
their money well when they have a full-time job after graduation. It is a great
time to learn about creating a budget and reconciling your account while you
only have a small balance and a few bills so a bank presence in higher
institutions is of utmost importance (Rhine et al., 2006).
The Federal
College of Agriculture, Ishiagu (popularly known as "FCA
Ishiagu") is based in Ishiagu,
Ivo Local government area of Ebonyi State,
Nigeria.
One would have thought that the presence of the ruling class since the year
1999 in government and in power would have brought facilitated development to
the community but that was not to be as the political enterprise turned
bloodier at each epoch.At the time of writing none of the licensed banks in
Nigeria has a presence at Ishiagu, no hospital except a minor private effort,the
state of the old missionary school's mostly of the Roman catholic mission is
nearly in ruins,poor state funding,infrastructural decay and above all lack of
qualified manpower.
1.2 Statement of Problem
Students
of Federal College of Agriculture Ishiagu currently live in a community that do
not have banking facilities or establishment. These unbanked community lack one
of the most important ingredients to establishing financial stability.
Operating through either cash economies or providers of alternative financial
services, students and occupants of this community are at a greater risk of
financial shock. By not participating in the financial mainstream, or perhaps
being excluded from it, unbanked communities almost always have to obtain the
necessary financial services at greater cost and hazard. Many without standard
bank services access rely upon POS outlets for access to financial resources such
as cash withdrawal and other bank related activities.
As
at the time of this research, students have to travel to neighbouring states in
order to obtain banking services. This has been characterized with lots of risks
and problems such as accidents due to transportation, high cost of living and
hunger among students who may not have the time and resources to travel to the
neighbouring states to access banking services such as payment of school fees,
withdrawal of money for school activities, this according to the researcher has
a tremendous effect of the student performance, hence the need for this
research.
1.3 Objective of the Study
The
main objective of this objective is to determine the effect of non-bank presence
on students performance using FcaIshiagu as a case study.
Specific Objectives include:
i.
The establishthe importance and role of
banks in academic environments
ii.
The determine the effect of lack of bank
on student academic performance
iii.
To establish the impact of bank presence
on cost and standard of living in the host community.
1.4 Research Questions
Based
on the foregoing objectives, the researcher tends to raise the following
questions:
i.
What are the importance and role of
banks in academic environments?
ii.
What are the effect of non-bank presence
on student academic performance?
iii.
To what extent does bank presence affect
cost and standard of living in the host community?
1.5 Significance of the Study
It
is hoped that through a successful result of this research study, it
will give benefit to the following:
1. To the students. The
research will serve as their voice on issues and problems of lack of banks in
their academic environment. It is hoped that through this research the problem
of non-bank presence in the school will be resolved.
2. To the institution. They
will get to understand the minds and the predicament of the students due to
lack of banking services in the institution, the institution management through
its power might be able to draw bank investors to the host community
3. To the community. The
study will give great value to community, if the outcome of this research
yields good results and banks are brought to existence in the community, the
community will begin to enjoy the services of banks.
4. To the researchers: Essentially, this
research intends to contribute significantly to the volume of literature
available in this area of finance. Such researchers and students who wish to
carry out a related study will have to use it as a research material.
1.6 Scope of the Study
The study centres on the effect of
lack of banks on students performance. The study covers the views of students
of Federal College of Agriculture, Ishaigu, which in turn comprise the
population of the study.
1.7
Limitation of the Study
In
the course of this study, the researcher encountered lots of constraint which
includes:
§ Time: There was no
insufficient of time to carryout this research such a enough time study.
§ Finance: Also a great threat to this study because of
this nature requires large funds which could not be obtained.
§ Academic Workload: Academic workload was another limitation of
this research work due to the nature of our lecture from Monday to Friday which
provides little time for student to go for the information needed for the
research.
1.8 Definition of
Terms
Bank: A
bank is a financial institution that accepts deposits
from the public and creates credit.
Lending activities can be performed either directly or indirectly through capital markets.
Banking Desert: Banking desert is an area with
inadequate banking services.
Community: Community as used in this study
means a group
of people who live in an area where an organisation operates. They are a group
of people having a religion, race, profession, or other particular
characteristic in common.
Performance: Performance is the manner in which an
organisation functions, operates, or behaves in the society.
Financial stability:Financial stability
is a state in which the financial
system, i.e. the key financial
markets and the financial
institutional system is resistant to economic
shocks and is fit to smoothly fulfil its basic functions: the intermediation of
financial funds, management of
risks and the arrangement of payments.
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