BoG urged to encourage efficient RCBs to do more

Some rural and community banks in Ghana have improved their operations significantly and are currently rubbing shoulders with some commercial banks.

Most of them have overcome the initial challenges including lack of capacity, management and quality personnel, and strengthened their liquidity base to become high-performing and effectively-managed banks -- as much as any other bank in Ghana.

However, RCBs are still restricted by an old policy of the central bank that does not allow rural banks to operate beyond certain geographical locations.

It is therefore in this regard that the Chairman of the Board of Directors who is also CEO of the Ghana Minerals Commission, Dr. Tony Aubynn, has made a sensible suggestion for the Bank of Ghana to consider categorising RCBs into various tiers based on criteria such as capital, liquidity, quality of board and management, proper risk management, and good corporate governance among other factors; so that RCBs whose performance go high above satisfactory could be allowed to operate outside their geographic locations.

This in his view will help further expand rural banking across boundaries within the country.

He has also reiterated an appeal to government through the Ministries of Local Government and Rural Development and Ministry of Finance & Economic Planning to consider channelling government statutory funds such as the District Assemblies Common Fund through rural banks as custodians for the disbursement of such Funds.

According to him, over the years RCBs have played an important role in rural financial intermediation and also contributed very significantly to local development in Ghana. RCBs are usually the first point of call when it comes to support for any community project.

Dr. Aubynn made these known during inauguration of the first phase of a business building complex project for Amenfiman Rural Bank Limited, at Asankrangwa in the Wassa Amenfi West district in the Western Region.

The office complex was built at a cost of GH¢1.3million with the primary purpose of easing congestion in the banking hall of the very old branch at the centre of Asankrangwa Township The second phase is expected to be completed by the end of this year -- a thirty-room shopping mall facility that will be made available to the bank’s valued customers.

The inauguration of the Asankrangwa High Street branch brings to eleven the number of branches currently being operated by the bank. These are Akropong and Akropong High Street, Bawdie, Dunkwa on Offin in the Central Region, and Tarkwa Tamso. The rest are Wassa Akropong and Wassa Akropong High, Enchi and Prestea.

Amenfiman Rural Bank continues to support businesses, families and general economic activities in its operational territories through loans and advances it offers to customers. In 2014 alone, the bank granted new loans to the tune of GH¢37.6million to customers -- with a very impressive recovery rate of 95%, and has a plan to exceed that figure in 2015.

In an address, the Chief Executive Officer of the Bank Alex Kojo Asmah announced the tremendous progress made by the bank over the past three years.

He attributed the Bank’s growth to the very dynamic and visionary board of directors and effective management, hardworking staff as well as loyal customers.

He mentioned that because of the very “solid pillars” mentioned on which the bank has been operating, its total deposits increased from GH¢15million in 2010 to GH¢59million as at the end of 2014 -- with loans and advances to businessmen and women, particularly in the area of petty trading and personal loans, totalling GH¢37.6million in 2014 alone.

The bank’s profit margin has increased very significantly over the years: it made a profit of GH¢450,000 in 2010 but posted GH¢ 4.5million in 2014.

The bank was adjudged the best deposit mobilisation rural bank in Ghana, and second most profitable, by the Association of Rural Banks at the maiden Rural & Community Bank Excellence Awards held recently at Tamale.