Rural and Community Banks (RCBs) must re-strategise and modernise their operations in order to remain relevant in the changing face of the banking industry, Daniel Ohene Kwaku Owusu, National President of the Association of Rural Banks (ARB-Ghana) has advised.
He said to achieve this, RCBs will need to strengthen their credit management practices and also source fresh capital to help them modernise, expand existing infrastructure and provide adequate buffers for contingent losses.
Mr. Owusu further emphasised the need for rural and community banks to imbibe risk management in their operations to control waste, minimise fraud and enhance performance in expanding financial inclusion, so as to provide easy access to affordable financial services for the vulnerable in deprived communities.
“Rural banks have become a special formidable force in rural financial intermediation, aside from competing favourably in the small and medium enterprises sub-sector.
“The conscious adoption of such measures into operations has the tendency of positioning RCBs to compete favourably in the banking industry,” he said in a speech read on his behalf by the Executive Director of ARB-Ghana, Mrs. Comfort Owusu, at the 32nd Annual General Meeting of Odotobri Rural Bank at Jacobu in the Ashanti Region, which also marked the bank’s 35th anniversary celebration.
In addition, the Association of Rural Banks’ president also encouraged RCBs to promote efficiency and ensure reliable, secured data through the gradual integration of ICT in their operations, backed with good corporate governance practices.
Mr. Owusu added: “We are very optimistic that with the adoption and implementation of pragmatic, customer-centred policies and measures, RCBs will continue to exhibit growth tendencies to meet the banking needs of people within their areas of operation”.
The RCBs render invaluable banking services to the vast majority of people in deprived and peripheral urban areas.
The over-144 RCBs in the country cater for over 6.6 million depositors, 1.3 million borrowers and have over 814 agencies across the nation as at December 2018.
Given their relevance to the financial inclusion agenda, Mr. Owusu urged government and the central bank to support rural and community banks within a robust and vibrant banking sector that will be capable of stimulating the country’s accelerated development agenda.
He said the Association of Rural Banks Ghana will continue to strengthen its advocacy role for government and relevant institutions to introduce far-reaching policies that will further stimulate growth and development of the rural banking industry.