The Fiagya Rural Bank Limited at Busunya in the Nkoranza North district of the Brong Ahafo Region has projected making significant growth in 2018, subject to a strong macroeconomic environment.
The bank has in recent years struggled to make meaningful growth, due to a plethora of challenges.
It was one of the financial institutions that were badly hit by the collapse of microfinance institutions like DKM and other Ponzi schemes in Brong Ahafo.
“With the macroeconomic environment showing signs of resurgence, coupled with the gradual revival of our catchment area from its economic doldrums, the bank will also tread cautiously on improved strategic banking policies to spur desired growth,” its General Manager, Kwame Baffo-Emmim, told the B&FT.
He said the bank will embark on strategic relocation of its branches in Sunyani and Techiman from the current obscure places to more commercially viable locations so as to enhance its customer base.
The Sunyani branch, for instance, is located opposite the Sunyani Technical University, and a new banking hall has been acquired at the Nana Bosoma Market area.
The bank in 2017 projected total deposit of GH¢15million, but achieved GH¢12million. With the aforementioned two branches’ relocation, the bank has set a target of GH¢18.9million deposits for 2018 and a profit of GH¢535,000, which would be an improvement over the 2017 achievement of GH¢355,000.
Mr. Baffo-Emmim also said the bank will pursue improved customer service delivery and effective credit management, all in line with its 2018 operational theme ‘Accelerating growth through effective performance management’.
He revealed that huge sums of loans went bad in the previous year – largely because of poor appraisal, especially with overdrafts.
The bank has budgeted to give out GH¢10.7million as loans; 40% has been allocated to micro businesses, a sector dominated by women.
Last year over 800 women benefitted, and the bank has decided to increase the number to 1,500 beneficiaries. Overdrafts will cover about 15%, whereas salaried workers will take 20%.
Farmers who are largely into cultivation of maize, yam and vegetables, as well as cottage industry players, have been allocated 25%.
The General Manager indicated that though agriculture is the main driver of the local economy, investment in the sector still remains a risky venture; hence the decision to advance the bulk to micro businesses with impressive recovery rates of about 100%.
“Some farmers are noted for diverting funds into their private recurrent expenses to the detriment of farming activities, and their loyalty is also in doubt.”
The bank has been able to meet the GH¢1million minimum capital requirement, but it had to resort to its reserves.
Mr. Baffo-Emmim observed that once the bank can afford to pay dividend to shareholders, it will attract other well-to-do locals to inject fresh capital into its operations.