The World Bank, an anti-poverty international financial institution, and ARB Apex Bank, a Ghanaian bank that operates under the supervision of the Bank of Ghana and is held by rural and community banks (RCBs), recently released a survey report, “Rural Banking: The Case of Rural and Community Banks in Ghana”, which identified fifteen of 136 Ghanaian RCBs for possible liquidation. The 15 RCBs in question were not deemed “practical and satisfactory” by the Bank of Ghana, which has regulatory and supervisory authority over Ghanaian financial institutions, including RCBs. The director of the Bank of Ghana’s Banking Supervision Department, Mr Okoh Sai, called on all RCBs to “establish strong management systems, adopt innovative business portfolios and penetrate into the rural communities in order to face the competition posed by the universal banks’ infiltration into their catchment zones” .
The CEO of the Ghana Microfinance Institutions Network (GHAMFIN), Dr David Andah, argued that mainstream banks are moving into RCBs’ market now that Ghanaian RCBs have created an enabling financial environment in rural areas and that RCBs cannot compete with the mainstream banks’ offerings. Dr Andah also called on the Ghanaian government to reconsider restrictions placed on RCBs, such as requiring new RCBs to raise at least GHS 150,000 (the equivalent of USD 105,000) in capital .
You may view the World Bank’s report at the following URL: http://siteresources.worldbank.org/INTARD/Resources/GhanaRCBs_web.pdf.
Ghana is one of eleven countries targeted by a recent USD 50 million investment by Barclays to improve access to microfinance .
By Lindsey Shaughnessy, Research Associate
About ARB Apex Bank: ARB Apex Bank Limited, founded in 2000, is a limited-liability company that operates twelve branches under the supervision of the Bank of Ghana. ARB Apex Bank, whose shareholders are rural and community banks (RCBs), supervises and funds RCBs and aims to provide RCBs with new technology, banking products and staff training. As of 2006, ARB Apex Bank reported total assets of GHS 51.4 million (the equivalent of USD 36 million).
About Bank of Ghana: The Bank of Ghana has regulatory and supervisory authority in Ghana over virtually every type of banking and financial institution, including rural and community banks, savings and loan companies and credit unions/cooperatives. The Bank of Ghana conducts annual on-site audits of these institutions. Nonprofit organizations in Ghana are not regulated by any government agency.
About Barclays: Barclays is a London-based financial services provider that operates in more than 50 countries. Barclays offers wealth management, investment banking, personal banking and corporate banking services. As of year-end 2009, Barclays reported total assets of GBP 1.38 trillion (USD 2.1 trillion).
About the Ghana Microfinance Institutions Network (GHAMFIN): The Ghana Microfinance Institutions Network (GHAMFIN) is an informal association of microfinance institutions (MFIs) in Ghana. GHAMFIN provides training, industry monitoring and microfinance product services to approximately 240 member institutions in all regions of Ghana.
About the World Bank: The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a distinct role in the Group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). The World Bank, established in 1944, has approximately 10,000 employees in 100 global offices, and is charged with reducing poverty in developing countries through leveraged loans.
Sources and Additional Resources:
 Microfinance Africa, “Fifteen Ghanaian rural banks marked for liquidation”, September 4, 2010. http://microfinanceafrica.net/news/fifteen-ghanian-rural-banks-marked-for-liquidation/
 MICROCAPITAL BRIEF: “Barclays Commits $50m to African Microfinance Groups Including Village Savings and Loans Associations”, August 27, 2010. http://www.microcapital.org/microcapital-brief-barclays-commits-50m-to-african-microfinance-groups-including-village-savings-and-loans-associations/
MicroCapital’s Microfinance Universe profile: ARB Apex Bank
MicroCapital’s Microfinance Universe profile: Bank of Ghana
MicroCapital’s Microfinance Universe profile: Barclays
MicroCapital’s Microfinance Universe profile: Ghana Microfinance Institutions Network (GHAMFIN)
MicroCapital’s Microfinance Universe profile: World Bank Group
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