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ECONOMICS

'Rural banks are important devt agents' –Minister

The Upper East Regional Minister Hon. Paulina Patience Abayage, has commended rural banks in Ghana saying that, the concept of rural and community banks has over the decades bridged the gap that hitherto existed between rural and urban dwellers regarding financial transactions.

Date Created : 1/8/2019 2:23:48 AM : Story Author : Peter Atogewe Wedam/Ghanadistricts.com

The Minister was speaking at the 28th Annual General Meeting of the Naara Rural Bank [NRB] held over the weekend in Navrongo, capital of the Kassena-Nankana Municipality.

In her keynote address, the minister observed that, this class of banks had the responsibility of mobilising savings in rural communities, investing these savings for good returns and to use the funds to provide credit through loans to micro and small-scale enterprises in their operational areas. This, the Minister noted, would subsequently trigger the needed growth and development in the local economies.

Madam Abayage also noted that, rural banks were very critical stakeholders in the successful implementation of government’s flagship programmes such as the “Planting for Food and Jobs”, the “Rearing for Food and Jobs” initiative, the “Planting for Export and Rural Development” Programme as well as other pro-poor interventions like the Livelihood Empowerment Against Poverty [LEAP], as Government usually channeled funds through such banks to state agencies to withdraw and disburse to the end-beneficiaries.

He added that, small-holder farmers and other farmer-groups in the rural areas also rely heavily on rural banks for quick and easy access to credit facilities to improve their farming activities.

According to the Regional Minister, records available showed that, there were about 140 registered rural and community banks across Ghana following the liberalisation of the banking sector commenced in the early 2000s. These banks she added, have been operating under the supervision of the ARB Apex Bank and with oversight checks from the Bank of Ghana, through its stringent regulations regime in order to safeguard the deposits of customers and other investors who transact business with the banks.

Touching on the recent challenges in the country’s financial sector which witnessed the collapse and or consolidation of some banks, she said the Bank of Ghana had identified poor banking practices coupled with weak supervision from some of its own departments, as the causes of these ill-fated banks. As a result, panic withdrawals and rampant closure of accounts by customers of the remaining surviving banks, has further crippled Ghana’s the banking sector. She therefore commended Management of the NRB for remaining resilient in the midst of all these storms noting that, the bank managed to increase its Stated Capital from 498,522.00 Ghana Cedis in 2016 to 1,502,012.00 Ghana Cedis by end of December, 2017 though the Ghana Cedi also kept depreciating against all other major currencies at the time.

Madam Abayage charged the ARB Apex Bank to step-up its supervisory role on rural banks as a “clearing agent” so as to increase the shareholders’ confidence in the rural and community as that was the surest way to stop the phenomenon of panic withdrawals in the system. Meanwhile she urged the Naara Rural Bank to keep up with its corporate social responsibility drive in helping the health, agriculture and education sectors in its operational areas stressing that, the local people and by large, the Government of Ghana always appreciate such complimentary efforts.

Board Chairman of the NRB, Mr. Robert Simple Atiiru in his report to the AGM noted that, though the bank operated in a very challenging economic environment during the period 2016-2017, it was able to increase its Total Assets from 29,540,303.00 Ghana Cedis in 2016 to 34,412,787.00 Ghana Cedis in 2017 while its Net Profit after Tax, also rose from the 2016 figure of 545,493.00 Ghana Cedis to 804,495.00 Ghana Cedis by close of 2017. The bank’s Deposits also shot up from the previous 23,156,478.00 Ghana Cedis to 28,361,645.00 Ghana Cedis in 2017.

Mr. Atiiru was however sad with the low returns on loan recovery within the period as he described the Total Loan Balance pegged at 15,263,699.00 Ghana Cedis as not too good for a bank like Naara despite its sterling performance over the period. He thus announced that the bank had contracted the services of a lawyer and a debt collections expert, Advance Debt Recovery Ghana to pursue and collect all outstanding owed the bank.

The Board Chairman also disclosed that NRB had procured and begun the installation of two Automated Teller Machines at the Navrongo and Bolgtanga branches which should be functional within a month or two to give their cherished customers 24-hour to their savings. With a staff strength of 67, the bank was able to make good gains within the reporting period and thus gave back to society by spending 11,161.00 Ghana Cedis on corporate social responsibility ventures. It spent 4,434.00 Ghana on education and 5,073.00 Ghana Cedis on health while agriculture received help to the tune of 2,520.00 Ghana Cedis.

In his welcome address earlier, General Manager of Naara Rural Bank, Mr. Samuel Namoog revealed that, the bank commenced operations in 1981 and was about the oldest rural bank to start work in the Northern, Upper East and Upper West Regions. Now with eight branches with good prospects to open even more, the Manager appealed to the Regional Minister and other well-to-do citizens of the area to buy more shares in the bank to make it more solvent. He hinted of a new mobile banking service known as U-Connect to be rolled soon which will give client the luxury of doing varied transactions via phone.