The total assets of Rural and Community Banks (RCBs) increased to GH¢5,129.2 million in the second quarter of 2020 from GH¢ 4,327.7 million around the same quarter in 2019, as indicated by the quarterly bulletin released by the Bank of Ghana on Monday, October 19, 2020.
This depicts a year-on-year upsurge of about 18.5 percent.
The Bank of Ghana intimated that “provisional data from the rural/community banks (RCBs) during the second quarter of 2020 indicate an improvement in performance compared to the second quarter of 2019”.
On a quarter-on-quarter basis, Rural and Community Banks recorded a 5.4 percent growth in their total assets, rising from GH¢4,865.8 million in the first quarter to GH¢5,129.2 million in the second quarter of 2020, the Bank of Ghana added.
By the end of the second quarter of 2020, the proportion of total assets of Rural and Community Banks in the bank system hovered around 3.5 percent, “broadly the same composition as at the end of the first quarter of 2020” but marginally lower by 0.2 percent compared to the same quarter in 2019, the Bank of Ghana opined.
A chart of figures detailing the composition of the consolidated assets of Rural and Community Banks presented in the quarterly bulletin saw bills and bonds at the very top of the chart, coming in with GH¢2,026.6 million, representing 39.5 percent of total assets at the end of the second quarter. Next in line was loans and advances, which came in with GH¢ 1,545.2 million, contributing to approximately 30 percent of total assets. Cash holdings and balances with banks followed closely behind with GH¢ 820.8 million, making up about 16 percent of total assets, and then other assets comprising about 14.5 percent of total assets, summing up to GH¢ 736.7 million.
According to the Bank of Ghana, a year-on-year analysis of each asset in the total assets of Rural and Community Banks shows that all the assets recorded outstanding growths. Cash holdings and balances with banks topped by 32.8 percent, bills and bonds followed next with 28.2 percent, other assets also grew by 7.6 percent, and then, loan and advances coming last with 7 percent.
Similarly, the quarterly bulletin indicated that there were also growths recorded quarter-on-quarter. Again, cash holdings and balances with banks recorded the highest growth of 20.4 percent, bills and bonds also followed suit with 3.6 percent, loan and advances came in with 3.1 percent, and other assets recorded a minimal growth of 1.1 percent quarterly.
“Loans and advances made by RCBs stood at GH¢1,545.2 million in the second quarter of 2020, indicating a rise of 3.1 percent from GH¢1,499.2 million recorded at the end of the first quarter of 2020”.
Overall, total assets of Rural and Community Banks have improved in the second quarter but contribute to less than 4 percent of total assets in the banking system. This indicative of the fact that there is more room for growth in Rural and Community Banks to enable them to assist with the government’s initiative of increasing financial inclusion by 27 percent.
“Under the National Financial Sector Development and Inclusion Strategy (2018-2023), Government expects an increase in access to finance from the current rate of 58 percent to 85 percent by 2023”.
