The one hundred and forty-one rural and community banks in the country have almost the same operational ideologies with similar concepts offering identical products, but with different board composition and management.
The industry has made very significant financial impacts since its inception about forty years ago, and has brought financial inclusion, particularly, to the people in the rural communities; and continues to make very substantial contributions to growth of the Ghanaian economy.
The ARB Bank Limited is the rural banking industry’s regulator, and its Managing Director Mr. Kojo Mattah argues that deeper collaboration among all the players, with a uniform “language” for product promotion, will make the industry much stronger.
Mr. Kojo Mattah said this at the 16th National Managers’ Conference of Rural and Community Banks held last Friday at Ho in the Volta Region.
This year’s conference was on the theme ‘Making Greater Impact in the Rural Banking Industry through Innovation and Collaboration for Sustainable Growth’.
The conference brought together managers of all the rural banks across the country and sought to address issues and challenges they are confronted with, suggesting strategies to address them.
There is a need for the industry players to introduce innovation into the rural banking space and become more customer-oriented and tailor products for convenience and satisfaction.
“This is where a platform like U-Connect becomes relevant – a product that allows our customers to conveniently do banking with their mobile phones. This is by no means a novelty. We are catching up,” he stressed.
He argued that for each rural bank to develop its own products, the cost implications are enormous as against all the rural banks working together to develop products and sharing the associated costs and benefits.
He drew managers’ attention to the Banks and Specialised Deposit-Taking Institution Act 2016 (Act 930) which specifies some restrictions on rural banks’ operations, saying there is a need for players to be conscious of that and collaborate more for growth.
“We must equally adopt the same collaborative stance in the marketing and promotion of our products and services. We will gain more mileage per spend and, hopefully, this should reflect in a better bottom-line for all of us. We must be determined to live the tag-line “together for progress”, he further stressed.
The Acting Executive Director of the Association of Rural Banks, Ghana, Mrs. Comfort Owusu, said after forty years of rural banking in Ghana, a resounding impact has been made in the rural banking industry by players and a lot has been achieved – mainly in terms of deposits mobilisation and employment creation, as well as financial intermediation and loans and advances.
According to her, the desire and goal not to rest on their oars but to make a greater impact in the rural banking industry, which is the central focus of this year’s conference, is very laudable and highly important. She also underscored the need for innovation and collaboration among industry players.
The existing market the RCBs seek to reach and capture has new requirements and unarticulated needs which require the application of better solutions in order to meet those needs, she said.
To achieve this requires innovative products, processes, services, technologies and business models, she indicated.
“Through innovation, rural banks can establish new and effective management systems which will increase the efficiency, productivity, quality, competitiveness and market share of the banks,” she said.
“It is absolutely necessary for us to create and nurture an environment of innovation in our various banks, and this will involve recognising the existing needs of the market, employing competent people and sourcing relevant technology; as well as investing financially into the creation of better systems and solutions.”