TWENTY-FIVE years ago, the Bosomtwe Rural Bank was established at Kuntanase in the Bosomtwe District of the Ashanti Region with the mission to play a complementary role in the overall development of its catchment area.
It was one of the pioneer rural banks of the region, and the task to meet its goals was huge, especially as the people had not appreciated the concept of rural banking as it is today.
The idea to start the bank was mooted by some opinion leaders at Kuntanase and other surrounding communities.
In those times, there was much difficulty by people in the lower income bracket to transact business with the commercial banks.
Many small-scale businesses failed to grow because it was almost impossible accessing credit facilities from the commercial banks.
Therefore when the then government introduced the rural banking concept, some communities readily embraced it because they realised the potential of the rural banks to address the lapses in the banking system for the rural dweller.
The birth of Bosomtwe Rural Bank in 1983 was, therefore, welcome news for farmers, small business operators and salaried workers who moved quickly to start business with it.
When the achievements of the bank were recounted by the Board Chairman, Mr Simon Osei-Mensah, at the 18th annual general meeting of shareholders at Kuntanase, which coincided with the silver jubilee of the bank, this writer came to the realisation that very soon some of the rural banks would rub shoulders with the established commercial banks in the country.
Currently, Bosomtwe Rural Bank operates six agencies at Kuntanase, Jachie, Kokofu, Atwima Amanfrom, Trede and Atonsu, as well as two mobilisation centres at Dadiesoaba in Kumasi and Atonsu Bokro. New premises have also been acquired at Ahenema Kokoben and Cedar Crescent in Kumasi and very soon the two agencies would be opened.
Mr Osei-Mensah, who is also the Member of Parliament (MP) of Bosomtwe, emphasised the strong performance of the bank over the years and said in spite of the recent international and domestic economic shocks, the bank had been able to stand on its feet to deliver quality services to the people.
People in the agricultural, industry, trading, transport and other areas of economic activity, have benefited from the bank.
In the last financial year for instance, a total of GH¢270,723.39 was channelled into agriculture as against GH¢124,870 invested in that sector in 2006, showing a percentage increase of 116.81.
On trading, the bank gave out GH¢506,114.68 to a number of people in 2007 while GH¢55,631.73 was disbursed to beneficiaries with micro-credit support of GH¢885,824.35 going to a number of people in the same year.
The Bosomtwe Rural Bank has also come out with a new product to assist newly trained teachers posted to the Bosomtwe, Amansie East and Atwima Kwanwoma districts, to motivate them to stay and teach in the communities.
Under the scheme called Teachers’ Settlement Loan Scheme, teachers whose salaries pass through the bank and have been at post for at least one month, are given loans up to GH¢1,000 to cater for their accommodation and furnishing.
The most interesting thing is that deductions start when the teachers start receiving their salaries.
According to Mr Osei-Mensah, the measure was to make sure that the rural economy improved and have direct impact on the living standards of the people.
Meeting social responsibilities of communities is one area that rural banks are expected to focus on. The Bosomtwe Rural Bank continues to offer assistance to communities and institutions within its catchment area in terms of community development projects.
Areas that continue to benefit from such assistance include education, health, security and scholarships.
Currently, the bank is sponsoring 17 schoolchildren in various second and tertiary educational institutions.
As a bank with roots in the rural areas, the Bosomtwe Rural Bank continues to play a leading role in the purchase of Akuafo cheque.
The purchases, however, remain a fluctuating exercise. Last year for instance, the total purchases amounted to GH¢362,275, which the bank believes was on the low side. The situation was attributed to the decision of most cocoa farmers to go in for cash sales instead of the cheques.
In the last financial year, the bank made a profit before tax of GH¢368,280.30, a significant improvement over the previous year’s profit of GH¢277,026.64.
Following that achievement, the bank was able to once again declare dividend payment of GH¢127,427.70 as against GH¢76,267.63 paid in 2006.
The bank’s total assets now stand at GH¢8,282,472.56 while the total deposit is GH¢6,499,717.37 with the networth standing at GH¢1,136,255.68.
Mr Osei-Mensah said notwithstanding the challenges facing the bank, it would continue to channel more resources towards financing small and medium-scale enterprises in the field of agriculture and cottage industries.
This is what is expected of other banks as Ghana moves to develop the rural areas.