IMPACT OF FINANCIAL SERVICES OF UNITED BANK OF AFRICA ON THE DEVELOPMENT OF FARM SETTLEMENT IN KWARA STATE

1.0 Introduction

1.1 Introduction

Agriculture is the second major sources that generate revenue to the Nigeria government after oil industry. The sector of the economy right from time has been neglected. The rural areas have not felt any positive impact on the development plan but only recorded a decline in agricultural productivity, which shows that the rural areas have been neglected at the expense of the urban areas. The banking industries one of every nations sectors that has a controlling impact on the economy particularly in terms of monetary policy, this is why federal government has continuously encouraged banks to expend their services and facilities not only to the urban cities but also rural areas.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Banking financial service when introduced in our rural areas will bring development or specifically economic development to the doorstep of every citizen in this country since between 70 – 80 percent of Nigerians lives in the rural area. Every Nigeria want to go to the urban area because of availability of infrastructural amenities like electricity, good roads, pipe borne water, civilized market operation, job opportunities and so on. If these social amenities continue to exist in urban areas, life in rural areas will still remain underdeveloped. Money they say is the blood that nourishes or gives life to any prosperous economy of a nation. For money to accomplish its aims in an economy, it needs to be properly managed and controlled in the banking sector.

According to Ubagroup (2021), in 1948 the British and French Bank Limited (BFB) commenced business in Nigeria. BFB was a subsidiary of Banque Nationale de Credit (BNCI) Paris, which transformed its London branch into a separate subsidiary called the British and French Bank, with shares held by Banque Nationale de Credit and two British investment firms: S.G. Warburg and Company and Robert Benson and Company. Following Nigeria's independence from Britain, UBA was incorporated on 23rd, February 1961 to take over the business of BFB. UBA eventually listed its shares on the Nigerian Stock Exchange (NSE) (Ubagroup, 2021).

UBA eventually listed its shares on the Nigerian Stock Exchange, in 1970 and became the first Nigerian Bank to subsequently undertake an Initial Public Offering (IPO). Today's UBA emerged from the merger of the dynamic and fast growing Standard Trust Bank, incorporated in 1990 and UBA, one of the biggest and oldest banks in Nigeria. The merger was consummated on August 1, 2005; one of the biggest mergers done on the Nigeria Stock Exchange (NSE). Following that merger, UBA went ahead to acquire Continental Trust Bank in the same year, further expanding the UBA brand. UBA also subsequently acquired Trade Bank in 2006 which was under liquidation by the Central Bank of Nigeria (CBN) (Ubagroup, 2021).

UBA had another successful combined public offering rights issue in 2007 and made further banking acquisitions of three liquidated banks namely; City Express Bank, Metropolitan Bank and African Express Bank. The bank also acquired Afrinvest UK, rebranding it UBA Capital, UK. The quest to build a strong domestic and African brand intensified in 2008 when UBA made further acquisitions of two liquidated banks, Gulf Bank and Liberty Bank. UBA has been intensifying its African footprint with the establishment of UBA Cameroon, UBA Cote d'Ivoire, UBA Uganda, UBA Sierra Leone and UBA Liberia as well as the acquisition of a 51% interest in Banque Internationale du Burkina Faso, which was the largest bank in the country with 40% market share. Currently, UBA has 20 African subsidiaries (Ubagroup, 2021).

Therefore, in Kwara State where the research was carried out, the activities that was conducted is to know the Impact of Financial Services of United Bank of Africa on the Development of Farm Settlement.

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1.3 Statement of Problems

The United Bank of Africa (UBA) is a profit making organization. There is a great fear in establishing in rural areas where it cannot maximize profit. Rural banking has been seen as indispensable if the nation is to develop its rural areas. The development of one rural area may not be a reality if services of commercial banks are not at the reach of our rural dwellers.

The problem therefore is how to resolve the profit motive of the rural commercial banks and the essential services being rendered to the rural dwellers. This project work is designed to measure to what extent the rural commercial banks have been able to involve the rural dwellers in the economic activities in terms of awareness.

A major problem is that the rural dwellers don’t patronize the bank industries. Most of the rural dwellers are farmers. They go to the farm before the bank starts its business and return only after they have closed to customers. Hence the bank finds it difficult to make profit.

Most villages are without electricity and pipe borne water and the banks spend much more that customers deposit to provide these amenities for workers. The rural banks encounter lot of problems cultivating banking habit in the rural dwellers. Rural dwellers live in mutual suspicion with strangers, for that rural branches workers are affected.

The rural banks also encounter problems of granting loans to rural dwellers and small scale businessmen in the rural areas. Because they are not too aware about why bank lend them loan, they use this loan for marrying wives, thus means of repayment becomes a problem. Although United Bank for Africa (UBA) has been chosen as a case study, other banks like Union Bank of Nigeria (UBN), first Bank of Nigeria, All States Trust Bank, Citizens Bank etc, can find this study beneficial to hem since they are all operating the same economic environment.

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1.4 Aim and Objectives of Study

The aim of the study is to investigate the Impact of Financial Services of United Bank of Africa on the Development of Farm Settlement in Kwara State. In achieving this aim, the following specific objectives were set out as follows:

1. To examine the impact the rural banking services, United Bank of Africa (UBA) have on the productivity of small and medium agricultural farmers and the entire economic activities of the rural areas.
2. To investigate the benefit of rural banking services in terms of mobilizing and organizing present farmers into efficient and active co-operative groups, small and medium scale farmers and integrated rural communities.
3. To evaluate how effective credit allocation among productive activities the rural areas have been realized.
4. To suggest policy measures to government in improving rural banking so as to have the desired development impact on the rural areas in Nigeria.

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1.5 Research Questions

The following questions will be addressed to to investigate the Impact of Financial Services of United Bank of Africa on the Development of Farm Settlement in Kwara State.

• Does the United Bank of Africa make adequate benefit from the accumulated investments of urban banking?
• Does a rural farmer make use of United Bank of Africa as a source of fund?
• What are the Financial Services of United Bank of Africa rendered to rural farmers in Kwara State?
• Does United Bank of Africa Financial Services facilitiesthe Development of Farm Settlement in Kwara State?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: The United Bank of Africa (UBA) does not make use of techniques/methods in determination of its return in rural banking.
• H1: The United Bank of Africa (UBA) makes use of techniques/methods in determination of its return in rural banking.

Hypothesis Two

• H0: United Bank of Africa does not derive any benefit from the accumulated investments of rural banking.
• H1: United Bank of Africa derives benefit from the accumulated investments of rural banking.

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1.7 Significance of Study

This study is essentially significant in that it is directed towards evaluating the effect the growth of rural banking activities has on the rural inhabitants which is a criteria aimed by measuring economic standard. It is also significant in the sense that it shows to what extend the rural banking programme in Nigeria has been successful. Nigeria is a developing country with more than 70 percent of her population living in the rural areas. These rural dwellers are faced with lot of hardship in terms of basic infrastructures. The rural dwellers are mostly farmers, definitely require loans, to reduce the hardship involved in acquiring input as well as cultivating their farms, therefore, the services of banking becomes very essential.

Conventional economics and experience suggest that by supplying food, labour and invisible surplus, the rural areas help to generate urban income and employment. They also help to stabilize if not reduce production cost for industries and cost of existences of commercial banks in the rural areas will speed up investment.

Besides, the study will serve as reference material for subsequent researcher in the field or related topics.

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1.8 Scope of Study

The study focuses on the Impact of Financial Services of United Bank of Africa on the Development of Farm Settlement in Kwara State, Nigeria.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.

Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.