Business News of 2014-05-23

BoG says rural Banks should list on the stock market

A former Deputy Governor of the Bank of Ghana (BoG), Mr Emmanuel Asiedu Mante, has urged Rural and Community Banks (RCDs) to take advantage of the securities market to raise capital for their operations.
He said given their sterling performance and the enormous opportunities that existed, they needed to go beyond the idea of community ownership and list on the stock market to attract both local and foreign investment to expand their activities.
Mr Mante was speaking at a day’s seminar on Enhancing the value of rural bank shares as an attractive asset class for rural and community banks in Kumasi.
The programme was put together by JCS Investment Limited, the Nwabiagya Rural Bank and Goodwell Investments, with support from the Norwegian Microfinance Initiative.
It is part of efforts at helping to provide the RCBs with the necessary technical assistance to draw additional investments outside shareholders contributions.
Mr Mante said although there had been some challenges, the performance of some RCBs in the last three decades showed they were matured and well-positioned to take advantage of the enormous potential at the rural banking sub sector, if they could attract enough capital for their operations.
He said they required opening up for investments to pull long term capital to boost their operations.
Mr Raymond Amanfu, Director, Other Financial Institutions Supervision Department of BOG, said as at the end of March total assets of the 136 RCBs nationwide stood at GH1,864 million.
Deposits they had mobilized and credits for the same period came to GH1,864.55 million and GH716.98 million, showing a-year-on-year growth of 13.95 per cent and 12.66 per cent respectively.
He, however, expressed concern about the situation where the top 26 RCBs controlled 52.5 per cent of the aggregate deposits and 50.8 per cent of the credits.
Mr Amanfu said that posed what he termed concentration risk and appealed to directors, shareholders and management of the banks to do more to reduce such concentration.
They should also be innovative, proactive and competitive in providing excellent services to customers.
Mr Enock Arkaife, Head Projects at the ARB Apex Bank, said reforms introduced had helped to revamp and strengthen the financial position of RCBs and urged them to continue to devise effective strategies that would help reduce risk.
Source: GNA
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