Nsoatreman Rural Bank prioritises agric financing to mitigate COVID-19 shock

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Contrarily to the hesitation of many banks and financial institutions to advance support to the agricultural sector, the Nsoatreman Rural Bank Limited at Nsoatre in the Sunyani West Municipality of the Bono Region has resolved to prioritise agricultural financing in the 2021 financial year.

“The bank has started giving out more agric loans, particularly to food crop farmers in our catchment area. Currently, agriculture is one of the viable sectors for investment. Besides, the move is meant to boost guarantee food security and help rebuild the country’s economy after the devastating impact of the COVID-19 pandemic”, Mrs. Agnes Grimmon Intsiful, General Manager of Nsoatreman Rural Bank, has said.

She explained that in the wake of COVID-19 threat to the socioeconomic fabric of the country, it has become imperative for more deliberate efforts to cushion agricultural growth and development, hence the decision. The bank has increased its loan portfolio for producers of maize, tuber crops, vegetable and cocoa as well, she added.

The General Manager who was speaking to the B&FT on the sidelines of the bank’s 31st annual general meeting urged the government to institute more flexible policies and interventions to make the agricultural ecosystem attractive for investors, especially banks, saying “the country’s agriculture space needs more practical and results-oriented interventions more than ever.”

Financial performance

In adherence to restrictions on public gatherings as a means to control the spread of the coronavirus pandemic, the meeting was held virtually. The meeting considered two financial reports, covering 2019 and 2020.

The Chairman of the Board of Directors, Kofi Agyeman in an address described the periods under review as probably the most challenging moments in the history of rural and community banks (RBCs).

He mentioned the financial sector clean-up and the associated panic withdrawals; the locked-up funds with defunct Financial Houses and Fund Management companies as toxicants that corroded the gains of RCBs. The emergence of COVID-19, he added, had compounded the woes of RCBs and the economy at large as non-performing loans have increased astronomically.

In the face of the ‘overwhelming challenges’ the bank he noted, posted satisfactory growth in performance indicators for the years 2019 and 2020. The bank increased deposits from a little over 21.97 million in 2018 to GH¢30.95 million in 2020, showing an increase of 11.40% in 2019 and 40.84% in 2020.

The bank closed its books in 2020 with total assets of GH¢33.48 million, representing year-on-year-on appreciation of 13.06% and 27.75% respectively. On the other hand, total loans and advances soared from GH¢7.45 million to GH¢10.18 million.

The sum of the bank’s short-term investments as at 31st December, 2020 was GH¢15.23 million as against GH¢9.07 million in 2018. The financial reports show that the investments grew by 13.32% in 2019 and 48.15% in 2020. In the years under review, the bank had its share capital going up marginally by 8.06% and 9.79% respectively, pegging to figure at GH¢GH¢1.41 million.

The Board Chairman however disclosed that the operational challenges eroded the profit gains of the bank, thus accounting for a cumulative loss of GH¢679,268. The loss coupled with Bank of Ghana’s directive, he indicated, made it impossible for the Directors to recommend payment of dividend to shareholders.

Mr. Agyeman expressed profound gratitude to the management and staff of the bank for their dedication, hardwork, loyalty and high sense of duty that propelled the bank to weather the storm during the difficult time.

HIGHLIGHTS OF PERFORMANCE

INDICATOR201820192020
Total Deposits19,727,69721,976,92230,951,957
Total Assets23,186,39126,213,97833,489,469
Total loans & advances 7,543,679 8,780,16410,185,040
Investment 9,072,14310,280,49615,230,496
Share capital 1,189,604 1,285,487 1,411,390
Profit before tax   399,903  (388,732)  (679,268)
    

Kofi Agyeman, Board Chairman (left) & Mrs. Agnes Grimmon Intsiful, General Manager-Nsoatreman Rural Bank (right)

 

Yaa Asantewaa Rural Bank using mobile banking to capture the unbanked 

By Kizito CUDJOE, Kumasi

As innovation continues to drive competition within the banking industry, the Yaa Asantewaa Rural Bank Ltd has reiterated its determination to pursue financial inclusion using mobile banking while enhancing its deposit mobilization.

This is against the fact that an estimated 40 per cent of the Ghanaian public are said to be financially excluded, and most of them are believed to be in the informal sector.

To this end, the Yaa Asantewaa Rural Bank Ltd has committed to regularly build the capacity of its mobile banking department, in order to sustain the efforts being made to provide the opportunity to also serve the unbanked.

The General Manager of Yaa Asantewaa Rural Bank Ltd, Michael Kwabena Afriyie, observed that the periodic training of the mobile banking staff will also position them “to face the current challenges within the market.”

Also, given that customer satisfaction is key to business sustainability, Mr. Afriyie, opined that embarking on such refresher activities for mobile banking staff regularly would significantly contribute to meeting the expectations of both existing and potential customers of the Bank.

As a strategic measure, the Bank adopts a ‘callback approach’ to depositors or customers to take feedback on mobile banking services rendered, intermittently.

“Establishing such business discussions, while it reassures the customers of the integrity of the system being deployed also provide a means for the bank to confirm deposit mobilised,” he stated.

The Bank is currently also about to deploy an e-transaction system to enhance the services rendered to customers or depositors. Deposits made to mobile bankers reflect in real-time, to both customers and the bank.

“One of the unique features of this system is that customers would be able to withdraw cash without coming to the banking halls which reduces the stress or distance a customer may have to cover to undertake such transactions at a branch.”

As part of the Bank’s Corporate Social Responsibility, it periodically donates hand sanitisers, nose masks and other PPE to customers in the fight of COVID-19, out of concern for the health of their depositors.

Additionally, the Bank has revised loan payment terms to enable customers to have some more time to repay their loans, given how the outbreak of COVID-19 has impacted businesses.

Mr. Afriyie said the Bank has been able to increase its loan portfolio to about 30 per cent for startup businesses, just to support the nature of businesses in this COVID-19 era.

The Branch Network Manager of Yaa Asantewaa Rural Bank, Mr. Kwame Dramani, said the Bank does not intend to expand its branch network this year. But he noted that plans are far advanced to expand the current branch network of 6, next year.

These emerged at the back of a capacity building training organized by the Bank for its mobile bankers.

The Executive Director of Proven Trusted Solutions, Mr. Joseph Akossey, who was the resource person for the training emphasized the importance of deepening the skills of mobile bankers to grow deposits.

“Deposit is the lifeblood of banking institutions, and for that matter RCBs need more deposits to improve the capacity to lend and also invest in the short term to generate interest income and also make profit to satisfy shareholders,” he stated.

While acknowledging the population of the country which is still unbanked, he noted that when mobile bankers are properly trained, they can mobilize more deposits from such segments of the population.

“Mobile bankers also need to cultivate the right attitude to discharge their responsibilities and hence the training touched on how they can replace certain negative attitudes with positive ones,” Mr. Akossey said.

He advised RCBs to use technology and other innovative approaches to enhance monitoring of their susu operations in order to minimize the incidence of susu deposit suppression. He added that the same can be used to alert customers interest about the receipt of deposit made.

Other topics the training covered include cardinal activities and skills mobile bankers must master; deposit mobilisation strategies; strategies for winning new customers among others.

In all about 52 staff of the Bank made up of 40 mobile bankers, 6 coordinators and 6 branch managers participated in the training.

Mr. Akossey interacting with participants at the training.

 

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