W/R rural banks consider setting up insurance co.

The Western Regional Rural Banks Association (WERBA) has opened it secretariat at Agona Nkwanta in the Ahanta West District of the Western Region.

Mr. Dickson Osei-Asibey, President of the Association of Rural Banks-Ghana, at the opening announced that the association’s council is working assiduously to establish an insurance company to be known as ARB Insurance Company Ltd.

This, he explained, will serve the needs of Rural/Community Banks as well as the general public.

He noted that introduction of the rural banking concept in July, 1976 has turned out to be a very successful novelty in the contemporary banking industry.

“The first rural bank was established in July, 1976 at Nyakrom in the Central Region -- it is a remarkable fact that there are as many as 137 rural banks in operation throughout the country,” he said.

He said some communities benefit the services offered by the agency network of some of rural/community banks -- there are prospects for the establishment of more rural banks, especially in the three regions of the North.

The policy stance of Bank of Ghana on operations of the rural banking concept is an institutional approach toward filling the wide gap in banking services that existed between the urban and rural communities.

Indeed, he said the association takes pride in the invaluable contribution the rural/community banks are making toward deepening rural financial intermediation.

“The impressive and lofty efforts the rural/community banks are making to raise higher the standards of rural folks really give credence to one of the key objectives of rural banking -- poverty alleviation,” he added.

“The opening of the secretariat building for WERBA is another milestone in the rural banking system and will go down in the annals of the association’s history as the first regional chapter to have its own secretariat building -- I wish to congratulate the President of the Chapter and his able executive members for this great feat.”

Nana Kwesi Agyemang, Vice President of the Western Regional House of Chiefs, noted that fighting rural poverty and hunger should be at the heart of all rural banks because it’s more relevant than ever if the country is to reduce poverty and hunger in the near-future.

He said the role of Small and Medium Enterprises (SMEs) and cooperatives across Ghana can no longer be ignored and must be encouraged to grow.

“They are the backbone of economic growth throughout the world -- this is the engine of the economy and the Rural Banks must empower rural businesses to survive, grow and be able to compete,” he said.

He noted that rural poverty can be reduced if pragmatic and well-resourced policies are geared toward development of the SMEs.

“Rural banks must donate part of their profits to meeting social developmental activities such as education scholarships, infrastructural development and helping the needy in their respective communities of the region,” he said.

According to him, rural banks must have the welfare of the people at heart -- this can be attained through the introduction of more credit facilities coupled with low interest rates.

He advised rural banks to introduce more flexible product and services into the market to alleviate poverty in the region.

Mr. Ebenezer Addo, the Western Regional Minister, said the banking landscape today is characterised by highly volatile banking competition – “it behoves you rural and community banks to reposition yourselves for the challenge and the task ahead.

“The time has therefore come for a paradigm-shift from the original concept of rural banks as a way to benefit from the economies of scale and provide financial services in the rural communities,” he said.