…celebrating 4 decades of rural economic impact
Akuapem Rural Bank Limited at Mamfe in the in the Akuapem North District of Eastern Region has officially announced the celebration of its fortieth anniversary celebration at a brief but colorful ceremony to kick start the activities to mark the bank’s forty years of existence and its rural economic impact.
The event among other things attracted very relevant stakeholders and institutions in the rural banking industry as well as other personalities who have contributed significantly to the present enviable state of the Bank after forty years.
There have been a number of activities lined up ahead through to the climax of the anniversary celebrations. Notable among some of the activities are health screening, quiz competition among junior high schools within the operational territories of the Bank, donations to institutions, the Annual General Meeting, Thanksgiving Service and Dinner Dance.
Historical Perspective
The Bank which is the twelfth rural bank to be established in Ghana and the third in the Eastern Region was inaugurated on 29th August 1980 by Dr Amon Nikoi, the then Governor of Bank of Ghana.
A small group of dedicated and selfless citizens of Akuapem decided to establish a bank owned and managed by the people of Akuapem to cater for the banking needs of small and medium-size enterprises on the Akuapem Ridge which has been a resounding success.
Akuapem at the time was one of the few places which was selected for the establishment of rural banks by the Central Bank. Mampong Akuapem was originally selected for the Bank to be based, but due to lack of accommodation, Mamfe was chosen to site the bank.
Founding members say the choice of Mamfe was perfect as it happened to be a junction town on the Accra – Koforidua trunk road. One Mr D.O. Ofosu gave out his property to be used as the banking premises for the business to begin.
Founders say they had challenges getting promoters at the time because of the problem of uncertainty as to the viability of such project since the rural banking idea was then in experimental stages.
According to Asiedu Mante, Bank of Ghana appointed and liaised with selected locals who acted as promotors to get the bank established and entrusted the collection of shares to the local promoters. Again, the Bank of Ghana liaised with the promotors to appoint the first Board of Directors after which they identified and renovated existing buildings and render them suitable to house a rural bank.
Operational Performance for the Past five years
Akuapem Rural Bank has grown in almost all aspects of financial performance indicators over the past 40 years.
In the past five years, the Bank has grown its deposits by an average of 21.39%, Gross loans by 10.95%, Shorts Term investments by 18.96%, Total Assets by 16.93%, and Net worth by 5.92%.
The Bank’s balance sheet is heavily dependent on investments so the Bank has been hardly hit by the continuous decline in interest rates since 2017.
According to the current board chairman, Kwame Gyeke-Amoako, to arrest the challenge of decline in profits, the Board is making conscious efforts to grow the bank’s loan portfolio through controller loans, non-customer pension loans, and scheme loans which are less risky.
In spite of the negative impact of Covid-19 in 2020, the Bank’s profits grew by 186.75% per management accounts as well as in all performance indicators in 2020 and the situation still persists in 2021 which indicates that the Bank is on a recovery path.
The Bank currently has 32,284 depositors, 2130 loan customers, 358 Credit With Education (CWE) grows with 7002 members, and 4933 active Susu clients.
The Bank over the past 5 years has spent GH¢146,215.00 on Corporate Social Responsibilities on schools, hospitals, security agencies and the communities in our on-catchment areas.
Corporate Governance Advice Going into The Future
Good corporate governance and risk management systems are at the heart of any successful business. In this regard both Board and Management have therefore been urged to adopt the corporate governance directive which has been issued by the Bank of Ghana for RCBs.
Also, the Board and Management are being advised to adopt effective risk management best practices that would help Akuapem Rural Bank to clearly identify, measure, control and mitigate the risks associated with the its operations.
It is also important that Directors of Akuapem Rural Bank possess the requisite knowledge, skills, and experience in corporate governance and banking practice to ensure that the banks’ corporate vision, mission, objectives, goals and targets remain on the right path and remain achievable.
It is also required that effective board oversight in ensuring that procedures, policies, practices and structures are put in place to avoid conflict of interest or undue influence under any circumstance as to impair professional and or independent judgement of directors and key management staff.
ARB Apex Bank Advice
The Head of Marketing, Business Development & Research Gorden Dery in an address presented on behalf of the MD of ARB Apex Bank, Kojo Mattah drew the attention of the board and management of Akuapem Rural Bank to the range of innovative changes sweeping across the rural banking industry which demands some strategies to be adopted by the RCBs going into the future.
According to him, the times call for more collaboration and co-opetition between RCBs which banks in specific geographies must see one another as partners and pool resources to enable them perform big ticket deals.
Apex Bank is of the view that two or three banks can collaborate to finance major projects, for example, RCBs can syndicate loans to help finance turnkey projects by the private sector or government’s flagship programmes such as One-District One-Factory (1D-1F). That way, the participating banks would share the accruing benefits as well as risks, which would not have been possible for individual banks to bear.
Again, shareholders and investors must be more than willing to defer dividends while reinvesting fresh capital for the investment in ICT and innovative products and services to help delight existing customers and attract new ones who would be convinced that the banks can provide them with the best solutions they might be getting from the other banks,
The General Manager of the Bank, Kingsley Kyere in an interview with Business & Financial Times said the Bank’s business focus in 2021 and beyond is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.
He has emphasised that the Bank would, follow stringent cost reduction policies, strengthen internal control measures and develop the human capital to meet demands of functioning profitability as well as achieving the objective of overcoming the shocks of the clean – up and the COVID-19 pandemic and its devastating effects.
