Do not be mere repositories of rural savings -- Duffuor

Kumasi (Ashanti Region) 16 Nov. '98

Dr Kwabena Duffour, Governor of the Bankof Ghana (BOG) has told rural banks not to consider themselves as mere repositories of rural savings.

He said they should rather assist to improve the productivity of the farmers by drawing up schemes for capital investment and credit extension to tap their potential.

The Governor was addressing the opening ceremony of the 10th biennial general meeting of the Association of rural Banks (ARB) at the Teachers Hall in Kumasi. The theme for this year's meeting is "Enhancing public image of Rural Banks".

Dr Duffour told them to ensure that they educate farmers on the use of improved seeds, fertilisers and farming techniques to supplement credit extension given to them. "In order words, the rural banks have to strive for incremental prosperity and welfare of the farmers", the Governor said, adding, "it is such constructive approach to farmers needs and welfare thatcan endear the banks to the community and boost their image."

Dr Duffour observed that it is not the size of a bank but the quality of its activities that upgrade the living conditions of the community that matters most in creating a positive image in the mindsof the public.

He, however, cautioned that establishing close relations with customers and the enthusiasm to support them should not be at the cost of enforcing credit discipline, noting that, a good record of collecting overdue loans sends a message to the community about the banking discipline and a bank's ability to enforce it.

Dr Duffour said it is for this reason that plans are far advanced for the establishment of an Apex Bank to ensure that rural banks followed strict banking practices.

He explained that already a Transitional Apex Steering Committee of which he is the chairman, has been established and initial funding for the proposed body made available through the BOG.

Additional funding are expected from the Agricultural Development Bank (ADB) and the International Fund for Agricultural Development (IFAD).

The Governor commended the banks for their impressive performance saying that as at last June, they had mobilised a total of 86.4 billion cedis in deposits as against 41.3 billion cedis in 1996.

Total loans and advances also stand at 45.7 billion cedis while they bought Akuafo Cheques to the tune of 135 billion cedis last year.

Dr Samuel Dufu, President of the Association, in a welcoming address, said rural banks are committed towards working tirelessly to improve on the economies of rural areas.