The Executive Director of Association Rural Banks, Ghana Mrs. Comfort Owusu has advised shareholders of rural banks to be advocates of rural banks and disregard any rumour by the public that has the propensity to dent the image of the industry they have invested in.
She has further advised shareholders to increase their shareholdings to strongly own the various banks in which they have invested which is the only surest way to make critical decisions at forums like the Annual General Meetings.
Mrs. Owusu has said shareholders should have confidence in the board of directors and go to them for any explanation rather than listen to rumours and follow blindly particularly on social media.
According to her, Bank of Ghana recognises the community content of rural banking and will not close down a rural bank that may have liquidity or operational challenges but will rather be prepared to work with ARB Apex Bank to reposition distressed rural and community banks, to enable them to better support rural economic development.
She said this should inform how rural banks are important to the regulator and it will always soften its stance in matters of regulation just to encourage rural economic development.
Mrs. Comfort Owusu gave the advice during the Annual General Meeting of Amansie West Rural Bank at Antoakrom in the Amansie Central District of Ashanti Region recently.
The Executive Director has also reiterated the call on government through the Ministry of Finance and Ghana Revenue Authority to still take a second look at the 25% corporate tax currently being paid by rural and community banks in Ghana.
According to her, the 25% tax is really suffocating the rural banks and this is not making them give the needed financial support to the communities in which they operate which is one of the core mandates of RCBs.
She stressed that the RCBs spend so much money to operate at their catchment areas and this is where the universal banks do not want to go and even if they do, they are only interested in doing business with a certain calibre of customers.
She further stressed that the RCBs go deep into the trenches through very difficult means which is more expensive to bring in the unbanked as well as petty traders and the poor farmers into their banking operation net and so government should consider these and reduce the tax as an incentive to them.
Business & Financial Times can confirm that these developments are compelling most of the RCBs to withdraw their community support and increasing their interest rate just to meet their operational cost and be able to pay good dividends to shareholders.
Rural and community banks in the country as per their mandate are supposed to alleviate poverty and build up the economic livelihoods of the rural and peri-urban communities.
By this description they target very low-income earners, petty traders as well as farmers in the deep-rooted rural communities.
Rural and Community Banks have been investing part of their earnings in corporate social responsibility (CSR) programmes and activities in their catchment areas, which are predominantly rural.
These contributions, which mostly come in the form of scholarships, infrastructural development, cash donations, supply and replacement of medical equipment, among others, in many ways help to enhance the livelihoods of rural dwellers and these come from the little profit they make.