Rural banks identified as catalyst for agricultural growth
Tamale, May 24, GNA – Mr Roy Ayariga, Programme Coordinator of the Northern Rural Growth Programme (NRGP) has identified the rural banking sector as the necessary catalyst that could propel the growth of the Ghanaian agricultural sector.
This he said was very particular in the catchment areas of the NRGP programme.
He said there cannot be any meaningful and successful commercial agricultural growth and transformation without a strategic contributions of the banking sector particularly rural and community banks to provide credits, loans and savings of farmers to stimulate development.
Mr Ayariga who is an agronomist expressed worry that in spite of the huge demand for the services of the rural banks in the northern parts of the country to champion the activities of the NRGP through credits to farmers, the Eastern Corridor had no such commercial entities to facilitate the process.
Mr Ayariga raised the issue in Tamale on Thursday during a day's orientation workshop for the establishment of new rural and community banks in Northern Region.
The workshop was aimed at creating awareness among the participants on the need to establish rural banks in their districts as well as the modalities and guidelines of establishing such facilities.
The NRGP was funded by the Government and the African Development Bank to provide long term financial assistance to farmers to reduce poverty by linking the value chain of agricultural activities from production, processing and marketing of produce.
Mr Ayariga said the organisation was striving to ensure that it converts the huge potential available in the Northern Savannah ecological zone into competitive advantage thus ensuring availability of quality seeds using better methods of farming to achieve good yield.
He said the opportunities were available and farmers just needed to take advantage of it to improve on their lives.
Mr Ayariga said the NRGP has in stock some water pump machines to be given to farmers in the region and urged them to avail themselves of the pumps for dry season farming.
Mr Richard Mettle Addo, Head of Research, Marketing and Cooperate Department of the ARB Apex Bank said the first rural bank said the big financial institutions could not be everywhere and therefore rural banks which are community owned could provide quick financial assistance to the people within 40km catchment area to fill the vacuum.
He said the current minimum requirement of the rural banks was GH¢150,000, adding that the rural banks currently controls about 9 per cent of the total domestic deposits of the banking sector and creates jobs for the people for improved standard of living.
He said there were currently 138 rural banks operating with more than 700 outlets.
Mr Addo said the ARB Apex bank would assist any district interested in establishing a rural bank saying “It comes with numerous advantages including international assistance”.
Alhaji Ismail Adam, Banking Supervision Department of the Bank of Ghana said the rural banks required a minimal registration fee of GH¢100.00 and other few formalities to establish.
He observed that some of the rural banks had not performed well because of weak institutional bottle nets, poor credit management, non-performing loans, poor accounting and low capital base.