The total assets of rural and community banks (RCBs) have hit GH¢3.44billion, as at the end of the second quarter of 2017, and constituted 3.4 percent of total assets for the entire banking industry in Ghana, the Bank of Ghana (BoG) has disclosed
The total deposits of RCBs stood at GH¢2.70billion representing 4.23 percent, while an amount of GH¢1.07billion representing 2.89 percent was granted as loans and advances to customers.
The loans went to traders, farmers, small-scale and medium enterprises (SMEs) and five other customers who hitherto could not have obtained finance from the traditional banks.
Furthermore, an amount of GH¢1.34billion was also recorded as total investments made by the RCBs within the same period.
This development is believed to be a clear testimony that RCBs have made a significant and positive impact on the lives of the country’s rural population.
But notwithstanding this performance, RCBs have been urged to embrace innovation – given the rapid transformation being experienced in the banking industry with the advent and growth of technological innovations.
It is seen that RCBs will need to invest in this direction to remain competitive and sustain their operations.
Mr. Yaw Akompong of the Bank of Ghana said rural banks cannot maintain their current performance without embracing innovation and building a strong partnership with all stakeholders in the delivery of services to its customers.
This call comes at a time when according to the World Bank report on Measuring Financial Inclusion (2012), 70 percent of Ghanaian adults do not have a bank account; not only because of poverty, but also because of the cost, travel-distance, and amount of paperwork involved in opening one.
Also, statistics from that same report by the World Bank show that among the 30 percent of Ghanaians who have bank accounts, 52 percent live in the urban areas. This implies RCBs still have a key role to play in deepening financial inclusion in Ghana.
Mr. Akompong, who was speaking on behalf of the Head of Other Financial Institutions Supervision Department of the Bank of Ghana at the 16th National Managers’ Conference of RCBs held at Ho, in the Volta Region, observed that innovation means novelty; that is, new things being done or old things being done in new ways.
This, he explains, includes the application of technological, institutional and human resources and discoveries to productive processes, resulting in new practices, products, markets, institutions and organizations that are improved and efficiency-enhancing.
The use of information technology in the Ghanaian banking sector has contributed significantly to the spread of innovative products and services being offered by banks. Key among these significant developments in the banking sector has been the introduction of mobile money by telecom companies in partnership with banks.
Now more than ever, financial institutions are under immense pressure to evolve and usher in new technologies to make banking a more user-friendly and efficient experience. But the strategies that spur innovation cannot be introduced overnight.
By Kizito Cudjoe l thebftonline.com l Ghana