Microfin Rural Bank (MRB) at Gomoa Pomadze in the Central Region has posted its first profit of GH₵231,419 after barely four years in operation, on the back of sterling growth in other key performance area.
The profit figure represents a 62 percent growth over previous year’s amount, with interest income, total net income, and total operating expenses recording 53 percent, 48 percent and 47 percent respectively.
The bank’s total assets increased from GH₵4,764,431 in 2015 to GH₵6,607,819 – recording a 39 percent growth, while net short-term investments also surged by an impressive 108 percent from GH₵754,288 in the previous year to GH₵1,569,098 in the period under review.
An aggressive mobilisation drive saw the bank raise its total deposits by 48 percent to GH₵5,138,875 in the year under review, compared to the GH₵3,471,673 that was recorded in 2015.
Loans and advances to borrowers by the bank jumped from the 2015 figure of GH₵2,985,753 to GH₵3,507,835 in the 2016 business year, representing a rise of 27 percent; with a minimal 2 percent retained under non-performing loans (NPLs) due to harsh economic challenges that affected recoveries.
About 54 percent of the total gross loan portfolio of GH₵3,594,171—which translates to GH₵1,951,526—was granted to over 7,500 clients in micro-enterprises (group loans) comprising rural women in petty trading and agriculture through the bank’s microfinance scheme.
Board chairman of the bank, Victor Antwi, announced the impressive achievement at the fourth annual general meeting of the bank held at the Perez University College premises in Gomoa Pomadze.
Microfin Rural Bank’s stated capital now stands at GH₵800,859, an 11 percent rise over the 2015 figure of GH₵719,488; and with amount slightly behind the GH₵1,000,000 requirement from the central bank, the board chairman entreated shareholders to increase their investment to enable the bank meet the December 2016 deadline.
“The bank has posted profits four years into its operations; I believe this should encourage existing shareholders to increase their shares and enjoy the full benefit of their investment in subsequent years,” he noted.
Achievements, innovations and outlook
Barely four years into its operations, Microfin Rural Bank is currently the best rural bank in the Central Region and the 12th-best rural bank out of the 142 Rural and Community Banks (RCBs) in the country, as per the latest ARB Apex Bank rankings. In terms of ratings, the bank has been upgraded from ‘satisfactory’ to ‘strong’.
The bank is currently piloting a cocoa farmers’ loan product dubbed ‘AKUSIKA’ to members of linked savings groups in cocoa farming communities at Assin and Agona Abodom. Beneficiaries of this product will have access to agric inputs, working capital and related agro extension services.
It is also participating in piloting the ARB Apex Bank’s U-Connect Platform, which allows clients of rural banks to transfer money from one account to another in the comfort of their homes.
Commenting on the gains, Mr. Antwi said management has not rested on its laurels but remains committed toward improving its performance to deliver more value for clients and shareholders.
Looking ahead, he said, the bank will leverage technology to improve service delivery while achieving corporate objectives in a sustainable manner.
“The bank will continue to support the ARB Apex Bank’s determination to provide relevant technologies and platforms to make RCBs more competitive and keep pace with advancements in the banking industry,” he added.
Collaborations to improve lives and create rural jobs
The bank, as part of efforts to deepen financial inclusion, collaborated with funding organisations and agencies to support agriculture and other related value chain activities.
The signing of a memorandum of understanding (MoU) with the Rural Enterprises Programme (REP) enabled it to disburse GH₵254,943 to 360 farmers and others within the agric value chain. Within the year under review, three cassava, pineapple and orange agro-processors were financed.
MRB is also working with the SNV Netherlands Development Organisation to provide improved fish-smoking and gari stoves to clients around Apam, Senya, Winneba, Bontrase and its environs through the bank’s microfinance scheme to help reduce the health hazards of smoke on the beneficiaries.
The bank was selected under the USAID Financing Ghanaian Agriculture Project (FinGAP) incentive grants award system to facilitate financing of agribusiness investment opportunities within the maize, rice and soy value chains.
It is also in collaboration with Interpay Africa, piloting a digital payments system through the mobile phone platform for its savings group and susu clients in the bid to enhance outreach. The project will be rolled out in 2018, depending on the pilot phase’s success.
According to Mr. Antwi, these interventions are in line with the bank’s focus on roping-in the unbanked rural population, creating more employment opportunities, and improving the lives of people as well communities within the bank’s operational area.