ABSTRACT

Promotion of a sustainable grass-root development and inculcation of banking habits to the people in the rural area still remain a mirage despite the existence of community bdnks for more than a decade now. The study, therefore, aimed at evaluating the performance of community banks though only in the south eastern part of Nigeria. The approach adopted was the distribution of questionnaire to gather information from both institutional owned community banks and community owned community banks. Data were also collected from secondary sources. The questionnaires were distributed using a randomly sampling technique. Community owned banks performed better in the loan and advances, overdraft, cash and short term fund, share capital, paid up capital, deposit demand account, time deposit fixed account while institutional owned community banks performed better in the gross earning, overhead cost, total assets and shareholder fund The amount of loans given by most community banks is determined by the income of the borrower. The problem of community banks is government delay in issuance of final License, no branches, no direct link with clearing other banks cheque. The government should mandate the central banks of Nigeria to issue final license to qualified community banks and allow them in central bank clearing house, lift up ban on unit bank to have branches for effective grass-root mobilization of fund.