Only 21 out of the 143 licensed rural and community banks (RCBs) in Ghana were sufficiently solvent and well capitalised as at the end of 2018, according to a report from the ARB Apex Bank, a mini central bank for the Rural & Community Banks
These banks do not need any regulatory intervention of any sort to make them efficient.
According to the report, the remaining 122 RCBs need regulatory interventions to help them function efficiently.
11 out of the banks were not rated because these banks could not submit their financial data for the last quarter of 2018. The mini central bank said these banks raised suspicion that they too are deeply troubled, the reason for which they could not submit their reports.
In-between the best performers and the worst, a category rated as fair, featured 20 RCBs within the year under review. A category rated marginal also saw 11 banks.
The RCBs in the two categories according to the mini-central bank can overcome their challenges with strenuous effort.
Both of these categories comprise RCBs with varying degrees of difficulties which, however, can be overcome, albeit with strenuous effort.
As at the end of 2018, 24 of the 133 RCBs that did file their financial performance data on-schedule had failed to meet the GHc1 million minimum capital requirement, even after the extension of the deadline by the BoG.
The report recommended that “macroeconomic indicators should continuously be considered in taking strategic and operational decisions,” and that “There is still a need to strengthen credit management structures to improve asset quality and ensure the adequate classification of risk assets.”