TABLE OF CONTENTS
Title page i
List of tables vi
CHAPTER ONE: INTRODUCTION
1.1 Background to the study 1
1.2 Statement of the Problems 4
1.3 Objectives of the study 5
1.4 Research Questions 6
1.5 Research Hypotheses 6
1.6 Significance of the study 7
1.7 Scope of the Study 7
1.8 Definition of Terms 8
CHAPTER TWO: REVIEW TO RELATED LITERATURE
2.0 Introduction 10
2.1 Conceptual Framework 10 2.2 Theoretical foundation 29
2.3 Empirical review 31
2.4 Summary and gap in Literature 36
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 38
3.2 Research Design 38
3.3 Sources of Data 39
3.4 The Population of the study 39
3.5 Sampler and sample size 39
3.6 Instrumentation 39
3.7 Reliability and validity of the data and test instrument 40
3.8 Data analysis techniques 40
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction 42
4.2 Analysis of Data 42
4.3 Test of Hypothesis 48
4.4 Major Findings 49
4.5 Discussion of Findings 49
CHAPTER FIVE: SUMMARY, CONCLUSION AND
5.1 Introduction 52
5.2 Summary 52
5.3 Conclusion 53
5.4 Recommendations 54
5.5 Suggestion for further study 56
- Background to the Study
The desire to enlarge banking facilities in the rural areas of Nigeria started with the rural banking scheme in the 1970s, and up to the 1980s. However, by the end of the 1980s, it became clear that the conventional banks were no longer willing to open more rural branches; this was simply because such branches were mostly unprofitable.
Opening them therefore ran contrary to the profit objective of the owners. In facing this challenge, Nigeria, like most other countries of the world have adopted the concept of micro financing as a means of mobilizing deposits in the rural areas. Microfinance banks in Nigeria operate in diverse environments where they render various categories of services and products to the target clients.
Microfinance banking is a type of banking service that is provided to unemployed or low income individuals or groups. Microfinance banking as a means of creating economic and social development has come a long way in Nigeria. Various comprehensive surveys of the diversified activities of microfinance banks have been provided since 2005 when the policy guidelines became operative. Since its inception, Microfinance Institutions (MFIs) has contributed in a special way in supporting small and medium enterprises by
effectively channeling the idle funds obtained through deposit mobilization to the general public in the forms of loans (short, medium or long term loan), so that it is being put into valuable production and other investment projects helping people to reach their goals.
The importance of Microfinance Institutions can never be overemphasized. Deposit mobilization is one of the major objectives of banks. Deposit is the foundation of all banking activities. However, microfinance banks as well as the banking sector in general do depend on customer’s deposit to advance its clients.
Since the proclamation of the term Micro financing in Nigeria in the mid-term 1970’s, several countries have copied this model, mostly in the developing world. However, the government of Nigeria adopted this policy in the year 2005 and inaugurated the microfinance scheme. The main objective for the promulgation of this policy is to provide finance to the economically active poor, excluded from financing from conventional banks, provide employment, engender rural development and reduce poverty. More so, in Nigeria it is important to note that there are over nine hundred (900) Microfinance banks today in Nigeria and they are regulated and supervised by the Central Bank of Nigeria.
REVIEW OF RELATED LITERATURE
2.0 Introduction- This chapter discussed past studies related to this topic and has to do with Conceptual, Theoretical, and Empirical Review which are discussed in details.
2.1 Conceptual Framework
2.1.1 Definition of Deposits
Deposit is the money placed with a bank or other financial institution. Deposits are generally made into either a checking or savings account, although many other types of accounts exist where deposits can also be made or deposit is a claim of customer over the bank on his account. A deposit will often be made into a savings account for the purpose of wealth storage, but such a deposit will usually only earn a relatively low interest rate. On the other hand, a deposit made into a checking account allows the funds to be made available for use through the writing of a cheque.
Other types of deposits to different types of accounts include: Term, Time, Call, Counter, Bank, Security, Current, Demand, Direct and Fixed Deposits (Hellman, Murdock & Stiglitz, 2000). A deposit is generally required upon the opening of almost all fiduciary accounts at banks and other financial and credit institutions. Banks mobilize deposits by making finances and by investing in various financial markets. Basically deposit mobilization is related to the creation of credits.
The banks would have special campaigns where they would interact with a lot of people and invite them to make deposits with their bank, Nada (2010).
2.1.2 Importance of Deposit Mobilization
First, deposit means a claim of customer over the bank on his account in economic concept, any kind of wealth needs to be distributed fairly. It affected the economic stability of the state. One of wealth type in individual level is money, which can be deposited in a bank. Microfinance Bank is one of the players who have this important role to mobilize the deposits.
To mobilize the deposits, Microfinance Bank can do several activities. First, making finance activities. Those activities are good in wealth distribution, which can be useful for another party who needs the money. In sample nowadays, financing activities in property, car, trading, etc are the type of financing which are distributed by the banks from depositor to the borrower (Cantoni, 2004).