This case study describes the history and business model of the rural and community bank (RCB) network in Ghana, analyzes its performance, identifies key issues, and makes recommendations on the way forward. The study analyzes the service delivery and financial performance of the RCBs at two levels: the network of all banks and a representative sample of 12 RCBs. It finds that although the service delivery performance of the RCB network has been very good, its financial performance has been mixed.
This paper is organized as follows: Section 2 describes the background of RCBs, including the socio-political context, a narrative on the emergence and evolution of RCBs, the structure of the Ghanaian rural financial market, the legal and regulatory environment, and an overview of major donor programs. Section 3 describes the business model of RCBs, including ownership, governance, staffing, products broader private sector. Section 4 analyzes the service delivery and financial performance of RCBs. Finally, Section 5 identifies some key issues, draws some lessons from the RCB experience and discusses options for the way forward.
This paper is based on a review of various published and unpublished documents, interviews with key respondents, and an analysis of data collected from the BoG, the ARB Apex Bank, and a sample of rural banks. The sample rural banks were selected primarily to reflect the proportional representation of different categories of rural banks according to the BoG’s performance classification of all 127 banks. Other factors used to select the sample of banks were location (primarily rural or periurban, and agroclimatic zone), size, and age.