Apex News
Last Quarter NewsLetter 1st OCTOBER-31st DECEMBER, 2007
In This Issue
- 5TH AGM OF THE ARB APEX BANK
- 5TH ANNIVERSARY AWARDS NIGHT
- MICRO FINANCE UPDATE
The Minister of Finance and Economic Planning, Mr. Kwadwo Baah-Wiredu, at the 5th Annual General Meeting of the ARB Apex Bank Limited has challenged the Apex Bank to move into full cost recovery of its services rendered to the Rural and Community Banks (RCBs) in order to sustain its operations in the ensuing years.
Citing reasons based on the dynamic nature of the financial sector, he said all forms of government’s support to the ARB Apex Bank in terms of grant, staff cost and tax holidays would soon be phased out.
Mr. Baah-Wiredu said "The Rural Financial Services Project would phase out this year. Furthermore, as from 2009 the tax holiday facility granted the Bank would expire", he added.
The Minister disclosed these at the fifth Annual General Meeting of the Bank. He noted that even though the ARB Apex Bank was a key process in the evolutionary chain of rural banking in the country, currently its business was limited because of inadequate capital.
He said the introduction of the Bank’s Regulation L.I 1825 (December, 2006) called for continuous strengthening of the regulatory agencies to adapt to changes in the domestic financial market.
The Minister, however, noted that the year under review was a challenging one for all rural banks in the country due to the instability of the price of crude oil and the rising energy prices.
He added that these and other challenges should inspire them to position themselves to enable them to remain on the market. He said at present, all indicators were showing signs of an improved macroeconomic environment, but what was needed was for the economic agents to generate economic activities in the rural financial sector.
Mr. Baah-Wiredu further stated that as the economy grew understanding and managing details of financial products and services had also become a daunting task for most Ghanaians.
Hence, he said financial literacy was crucial to deepening financial intermediation in the country, because most people lacked the basic financial knowledge and skills to ensure long-term stability for themselves and their families.
The Minister appealed to the Bank to assist the RCBs to develop agriculture to achieve food security and improve incomes as well as enhanced institutional co-ordination in the country.
He concluded that “Government had observed with concern the decreasing flow of credit to the agriculture sector which accounts for 35 percent of Gross Domestic Product and 60 percent of employment, and that, only six percent of the Bank’s credit goes into the sector.”
Presenting the 2006 operational results of the Bank, Dr Samuel Dufu, the Board Chairman, said the ARB Apex Bank since January this year had injected a new sense of dynamism into the operations of the RCBs, bringing it into the mainstream economy.
He disclosed that the bank’s total assets rose from 2,260.83 billion cedis in 2005 to 2,987.54 billion cedis for the year under review, showing a market share of 5.42 percent.
Total deposits also increased from 1,688.02 billion cedis in 2005 to 2,264.61 billion cedis in 2006, reflecting a market share of 7.56 percent.
Total loans rose substantially from 775.23 billion cedis to 1,151.00 billion cedis, giving an overall market share of 4.56 percent.
He added that the year 2007 was, therefore, prioritized to expand the bank’s to improve growth and financial performance as well as managing expenditure and accelerating the recovery of ailing RCBs.
This, Dr Dufu believed, would be achieved through consolidation and increase in money transfers to grow their commission-based incomes.
He said the Bank had also initiated strategies to grow its loan portfolio by offering competitive loan packages to the RCBs for on- lending to their customers.
In addition, Dr Dufu announced the establishment of a support fund for RCBs in distress to serve as a pool from which ailing RCBs would be resourced.
AWARDS NIGHT
Mr. Dela Serlomey, Head of the Banking Supervision Department of the Bank of the bank of Ghana, has advised Rural and Community Banks (RCB’s) to position themselves and contribute their quota to the banking industry which was undergoing reforms to help make Ghana’s economy a middle income one.
This was during the awards and dinner dance which climaxed the celebrations of the 5th Anniversary of the ARB Apex Bank Limited. The occasion was used to honour and reward hardworking staff, regional chapters of the bank, people who had helped to lay the foundation stone of the bank and some retired governors of the Bank of Ghana.
The chairman of the Board of Directors, Dr. Sam Dufu, said the bank had lived up to its expectations and urged the RCBs to work harder in this competitive industry.
Mr. Sampson Hammond, Director at the Ministry of Finance and Economic Planning, encouraged rural banks to outdoor services that will entice more people to save.
MICROFINANCE UPDATE
The Credit Unit continues to disburse funds to the Rural and Community Banks (RCBs) and Non – Governmental Organizations.
RCBs received various funds under MASLOC for disbursement to their customers for various income generating activities.
Participating Financial Institutions (PFIs) under the Community Based Rural Development Project (CBRDP) also received funds for onward disbursement to clients, including owners of Learning Centers which received both grants and loans.
Trainees from some Learning Centers also received loans and grants to support their set up after they had received training from the Learning Centre.
The Unit is still processing applications received from PFIs. Significant is the fact that repayment of principal and interest has begun.
Under the Roots and Tuber Improvement and Marketing Programme, banks have started expressing interest to participate in the project. Accreditation is expected to commence soon. RCBs which have been interested are encouraged to submit their Expression of Interest to the Apex Bank.
Through the exchange between the ARB Apex Bank and the African Rural Agricultural Co-operation Association (AFRACA), five officials from Kenya and Ethiopia visited the country to understudy the Apex concept as well as the rural banking model. They visited Kakum, Ga and Upper Manya Kro rural banks.
The Bank in pursuit of product development for RCBs had signed a Memorandum of Understanding (MOU) with the Institute of Music and Development. This is a scheme intended to provide credit to players in the music industry. It is expected to be piloted at the La Community Bank in the Greater Accra Region and the Atwima Kwanwoma Rural Bank in the Ashanti Region. The project will eventually cover the whole country.
The Unit is expected to explore other areas of benefit to the RCBs and the rural people the coming years ahead.