COMPUTERIZATION'S INFLUENCE ON THE MICROFINANCE BANKING INDUSTRY
- Project Research
- 1-5 Chapters
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- NGN 3000
Background of the Study
The utilisation of computers in the preparation of various sorts of accounts, the processing of client statements of accounts, money transfers, and cash dispensing versions have all contributed to the influence that microfinance banks have had on the urban environment of Nsukka. Transactions in banking that were formerly carried out manually, before the introduction of computers into the financial sector, are now routinely carried out by microfinance banks (Kricks, 2021).
According to Akukwe (2003), the magnetic in character recognition (M.T.C.R) technology was utilised by bank chequ as early as the 1950s. The term "micro financing bank" is still often used in today's banking industry. The utilisation of automated teller machines (ATMs) and electronic fund transfer (EFT) systems, on the other hand, represents the most recent advancement in computer technology to be found in the banking sector (Malhotra, & Singh, 2021). Your payroll checks will be deposited into your account electronically so that you may easily access them, and your recurring monthly bills will be paid on time on your behalf as part of the electronic funds transfer system. Again, funds may be readily moved from your savings account in order to pay the cheques that you have already written to individuals or organisations in relation to the purchases that you have made or the donations that you have declared (Mohammad, & Saad, 2022). An automated teller machine (ATM) is a specialised computer terminal that may be found in places like the interior and outside of banks, supermarkets, shopping plazas, and hotels for the purpose of making cash deposits and withdrawals as quickly as possible. Customers are able to transfer funds across accounts using this arrangement, eliminating the need to physically visit the bank (Orhan, 2021).
Robinson (2001) investigates microfinance banks as small-scale financial services, primarily credit and savings provided to people who farm or fish or herd who operate small enterprises or who provide services: who work for wages or commissions who gain income from renting out small amounts of land, vehicles, draught animals, or machinery and tools along with other individuals and groups at the local levels of developing countries both rural and urban (Orhan, 2021).
According to Ndiaye (2005), having access to improved financial services and access to access to more and better ways of turning savings into lump sums helps poor people from sliding deeper into poverty. It also helps people in Nsukka lay the foundation for their aspirations to improve themselves and their families.
In the majority of affluent nations, the chapter on the history of microfinance banks has not yet been written. It won't be easy to do so in a lot of countries since they don't have enough written documents. Because of this, it is difficult to build on the current foundations of microfinance, which are primarily informal, and to gain knowledge from previous experiences (Kricks, 2021). For instance, Nigeria is the only African country south of the Sahara in which it is known that microfinance existed at least 500 years ago, mostly in the form of rotating savings and credit societies. This is because Nigeria is the only country in which this information is available. Among the Yoruba people of Nigeria, they are referred to as "Esusu" (Mohammad, & Saad, 2022). A great number of west African nations now use the phrase lingua France. The respondents believe that it is simpler to recruit members of their immediate family into group-based associations than it is to do so with members of other ethnic groups. This lends credence to the conclusion reached by Zellers et al. (2001), which states that roughly half of the members of the group are connected to one another. Because point responsibility and the cohesiveness of the group functioned as collateral for group members seeking microcredit from microfinance NGOs, the information that is already known about potential members is given a substantial amount of weight and value (Zellers et al, 2001).
The results of UNCDF (1997) and Adebayo are supported by the fact that there were significantly more female respondents (57 percent) than male respondents (43%). The distribution of respondents according to gender revealed that there were more women than men (1997). Due to the fact that Olomola (2001) and Adyeye (2003) found that the majority of members of microfinance NGOs are women, who along with children form the group that is vulnerable to poverty, NGO microfinance delivery in the area is a genuine initiative to alleviate poverty as a result of this finding (Orhan, 2021).
C.F. Strickland, a British expert on cooperatives, conducted research on the Esusu in 1934 to see whether or not it might serve as the foundation for contemporary cooperative organisations in western Nigeria. Having worked in India in the past, where he was exposed to revolving finances, he hypothesised that the Esusu must have been introduced from India (Kricks, 2021). Which he considered a superior culture at an unspecified time and concluded that in this cause one might as well import cooperative from England instead of modernising the Esusu/Strickland the co-operative society's ordinance introduced in 1935 and modelled after British colonies in Africa. This ordinance was introduced in 1935 and modelled after British colonies in Africa (Kricks, 2021).
Only in eastern Nigeria was there a flourishing of financial cooperatives, which were supported by educated cooperative officers to build on the ever-present Esusu. The Esusu, in its Igbo iteration, would have benefited from a legal and administrative structure, according to this interpretation. Isusu, Adashi, and Bam, in addition to ROSCAS by whatever name they are known among the other 350 ethnic groups; had their origin not been misunderstood.
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