- Making giant strides in agri-business financing
- Pledges support for farmers under 1D1F
Microfin Rural Bank (MRB), located at Gomoa Pomadze in the Central Region, has recorded an impressive 83percent growth in profit for the 2017 operational year, moving from GH¢231,419 the year before to GH¢423,685 in the year under review.
The bank also recorded an increase in all key financial indicators with interest income, total income and total operating expenses surging by 29percent, 33percent and 28percent respectively.
In 2017, MRB grew its total assets by 47percent from the previous figure of GH¢6,607,819 to GH¢9,703,749 while loans and advances also moved from GH¢3,507,835 in 2016 to GH¢4,708,136, representing an increase of 34percent.
Out of the total loans disbursed, about 75percent of it was granted to the bank’s microfinance clients comprising cocoa farmers, susu and village savings groups, with women and youth in rural communities making up 85percent of the beneficiaries.
Impressively, MRB is among the first rural banks to meet the central bank’s new minimum capital requirement of GH¢1million. It currently boasts a stated capital of GH¢1,003,281, which is a 25percent growth compared to last year’s GH¢800,859.
The bank’s also grew its deposits and short-term investments by 30percent from GH¢5,138,875 to GH¢6,683,048 and its short-term investments by 75percent from GH¢1,569,098 to GH¢2,739,526 in the year under review.
Barely five years into its operations, Microfin Rural Bank is currently the best bank in the Central Region and ranks third out of the total of 142 rural and community banks (RCBs) in the latest ARB Apex Bank Rankings.
Board Chairman of the bank, Dr. Victor Antwi, in an interview with the B&FT, attributed the impressive performance to MRB’s unique business model that encourages its customers to be part of the bank, in addition to its strategic partnerships with some development/donor agencies.
He indicated: “It has always been the dedication of the board and management to push for positive results in our various performance indicators.
As a bank for the rural community, we have innovative products that supports the business of the area, especially when it comes to agri-business financing because we understand the dynamics of the sector.”
To improve its loan recovery rate, the bank boasts a team of affable field officers who have built cordial relations with its customers and savings groups whom they constantly educate on the need for them to repay their loans.
Dr. Antwi added: “About 83 percent of our customers are women; it has been verified that women repay loans better than men. We also have systems in place to incentive and reward staff for good performance. All of these account for the sustained growth of the bank.
Recounting the bank’s support to the community and businesses within its catchment area, the board chairman stressed that MRB’s five years of operations has been very impactful but the prospects are even brighter.
“The bank’s impact over the years has been tremendous in terms of empowering communities, financing businesses to expand and helping traders to increase their income levels and livelihoods.
We have cassava growers who can now process their produce into gari through value addition. Also, a trader who used to handle 10 bags of corn now handles over 100 bags. This is the kind of cushioning we want to give to traders and businesses within our catchment area,” he shared with the B&FT.
Looking ahead, Dr. Antwi said Microfin Rural Bank plans to leverage its branch in Mankessim to drive its expansion in the Central Region targeting Assin, Mfantseman and Cape Coast.
He noted: “We want to reach out to more people in underserved communities in the region with access to finance; we want to be close to their businesses and help them to grow.
Another strategy will be to partner communities doing specific products and help them to improve their productivity and profit levels.”
Dr. Antwi further expressed the bank’s readiness to offer financial muscle to groups of farmers who want to produce to feed factories as part of the government’s industrial agenda, One District One Factory.
“We want to finance groups of farmers who are producing to feed specific factories under the government’s One District One Factory programme.
If you the terrain, you are then able to know when to disburse loans to farmers, then financing agriculture becomes less risky. As a bank, we have the leverage and understand the dynamics of the sector to be able to support the 1D1F”
Acting General Manager of MRB, Abdul Rauf Ibrahim, told the B&FT that the bank’s impressive feat is a strong assurance to its shareholders and customers to continue doing business with MRB in faith and confidence because it has a bright future.
“We have in place right systems and structures backed by innovative products and people with in-depth knowledge in rural financing, and that is driving the bank’s performance.
For us at MRB, we remain highly committed towards the course of financial inclusion considering our recent partnership with Interpay. Majority of the people in this region are excluded from the financial sector and that remains our key focus,” he said.
Sharing a few success stories of the bank, he said: “We are here to help businesses to expand and it is encouraging to know that from table tops, some have been able to build stores, see their wards through school and in some cases, build apartments of their own.”