Elmina, Dec.15, GNA - Managements of 96 out of the 121 community and rural banks in the country on Thursday, signed a 'downstream' subsidiary loan agreement with the ARB Apex Bank, for 7.9 million dollars to support enterprises within their catchment areas. The money being provided by the Government and the World Bank is to be operated as a revolving fund and the micro-finance component of the Community Based Rural Development Project (CBRDP).
Mr Emmanuel Yaw Sarpong, Head of Banking Operations at the Apex Bank, signed the agreement on behalf of the bank, while officials of the community and rural banks endorsing it, as 'participating financial institutions' at Elmina. Mr Sarpong told representatives of the banks that success of the micro-finance scheme would greatly depend on how efficiently they managed the funds, and appealed to managers and project officers of the banks to be diligent, prudent and ensure quality customer care in the discharge of their duties. He said this was imperative, as the "face of rural banking was gradually changing," and had now won the confidence of the Government and other stakeholders, as reliable micro-financial institutions at the rural level, for effective rural financial intermediation.
"It therefore, behoves on us to sustain this confidence and image through effective and efficient delivery of micro credit using international best practices," He added. Mr Sarpong asked the participating banks to set up specialized micro-finance units within their credit departments to handle micro credit programmes with the required attention and expertise. He observed that one area of concern, which was seriously affecting the performance of micro credit programmes, was the late submission and inaccurate preparation of loan returns, which had affected prompt reports to project coordinating units of collaborating agencies.
Mr Sarpong cautioned them that under the CBRDP, reporting requirements were very essential and important to its success and tasked the participating banks to endeavour to be serious with their monthly submissions and quarterly reports. He said as part of the start up of the programme, a 'project appraisal training programme' would be organised for managers and project officers of the participating banks to improve on their credit appraisal skills and advised them to participate in the training programme to ensure the smooth implementation of the project.
Mr Clement Nminibapel, National Rural Enterprises Specialist at the Rural Infrastructure Coordinating Unit (RICU), said provision of the money by the Government was to strengthen the capital base of the banks and mainstream their lending activities. He therefore, asked them to ensure prudent use of the money by lending it out to "quality clients" to facilitate prompt repayment in order to achieve the objective of the capitalization drive by the Government, as well as the expected development of rural-based enterprises.
Mr Theodore Gyau, a member of the ARB Apex Bank Board and Board Chairman of Anum Rural Bank, said it was "welcoming and heart warming" to hear that rural enterprises were to be given a boost through the micro-finance scheme. He was optimistic that the scheme would empower the banks in their operations, as well as economically empower people within their catchment areas, to enhance poverty alleviation in the country. Mr Gyau stressed the need for prudent management of the funds by the rural and community banks, which were facing competition from the commercial banks, that were finding their way back to the rural communities to operate.