At the 23rd Annual Conference of the Chief Executive Officers (CEOs) of Rural and Community Banks (RCBs) in Ho on Thursday, October 17, 2024, Dr Toni Aubynn, Chairman of the Board of Directors of ARB Apex Bank, delivered a keynote address urging the government and Bank of Ghana to deepen their collaboration with rural banks to expand financial inclusion across Ghana’s rural areas.

The conference, themed “Expanding the Frontiers of Business for Rural and Community Banks Post-DDEP: The Role of RCBs,” highlighted critical challenges and opportunities for rural banks in the post-Domestic Debt Exchange Programme (DDEP) era.

Recognizing Challenges and Legacy Issues

Dr Aubynn began by acknowledging the significant challenges that rural and community banks have faced over the past few years, including the residual effects of the 2017 financial sector cleanup, which has left approximately GHC 500 million of depositors’ funds locked up.

He also pointed to the economic disruptions caused by the COVID-19 pandemic, low capitalization, and the difficulties imposed by the DDEP. Despite these hurdles, Dr Aubynn commended the resilience and performance of RCBs in maintaining financial services in rural Ghana, stressing that rural banks have proven to be crucial pillars in the country’s financial system.

"Our performance has been commendable, particularly considering the RCBs’ ongoing challenges with legacy issues," he remarked, acknowledging that the sector’s resilience has been vital in ensuring financial stability in under-served areas.

Call for Prioritized Government Support

With elections looming in December 2024, Dr Aubynn posed a critical question: What role should RCBs play in the government’s financial plans for rural development?

He proposed that rural banks be prioritized as primary beneficiaries of government financial assistance aimed at uplifting rural economies. He urged the government to consider providing a one-time concessionary loan to RCBs, which would empower them to lend to small business owners in the regions.

“We are well equipped to disburse such concessionary loans, which can serve as significant instruments for poverty alleviation,” Dr. Aubynn emphasized. By partnering with the government and the Bank of Ghana, rural banks could significantly enhance their impact on national development, aligning their operations with broader economic goals.

Strategic Capacity Building for SME Growth

One of the key initiatives highlighted by Dr. Aubynn was ARB Apex Bank’s recent master class training workshop for small and medium enterprises (SMEs). The workshop, aimed at equipping selected RCBs with the necessary skills to develop value-added SME enterprises in rural areas, is part of a broader strategy to promote sustainable economic growth in these regions.

Dr Aubynn stressed the need for additional government support in the form of financial assistance to RCBs for on-lending to small business owners. This support, he noted, could significantly improve the scope and impact of rural banking on poverty alleviation.

“Equipping RCBs with essential skills and resources via workshops such as these will facilitate sustained growth and development of SME enterprises in rural regions,” he said, underscoring the importance of capacity-building programs for the long-term success of rural banking.

Appeal for Capacity-Building Support

In his concluding remarks, Dr. Aubynn appealed for grants to support capacity-building programs for RCBs. He expressed confidence that, with the necessary support from key stakeholders, rural banks could continue to drive economic growth and improve livelihoods in Ghana’s rural communities.

“We respectfully request your assistance in securing special grants to support capacity-building programs for RCBs,” he said, calling on government officials and financial authorities to recognize the critical role rural banks play in fostering economic development.

Dr Aubynn’s speech set an optimistic tone for the future of rural and community banking, with the expectation that by next year’s conference, significant progress will have been made in addressing the sector’s challenges and expanding its influence.

As Ghana continues to navigate economic recovery in the post-DDEP era, the role of rural and community banks will be central to financial inclusion and rural development.

With targeted government support and strategic partnerships, RCBs have the potential to be powerful instruments for poverty reduction and economic growth. Dr Aubynn’s remarks serve as a clarion call for stakeholders to harness this potential and create a more prosperous future for Ghana’s rural communities.