Rural Banks urged to prioritise social responsibility

Mr. Michael Justice Baffoe, MCE for Kintampo-North in the Brong Ahafo Region has underscored the need for Rural and Community Banks (RCBs) to prioritise the activities of social responsibility to better the fortunes of residents in their operational zones. This, he says, will serve as a barometer to measure their success but not the profit margin they generate.

He said though every corporate body has a prime objective to make profit, the concept of rural banking places “greater emphasis” on social responsibility rather than maximising profit, adding: “The success of every RCB should be measured by its sensitivity and readiness to address the needs of its customers including the rural poor, and not by the margin of profit they generate.”

Addressing the 28th Annual General Meeting of shareholders of the Kintampo Rural Bank held at Kintampo, the MCE also urged RCBs to focus on good governance practices to create the right environment for business to thrive.

Most rural banks devote part of their profits to meet social developmental activities such as donations to support education, health, traditional administration and the needy in their respective communities; it is worthwhile to entreat banks to step-up their social intervention programmes to support the vulnerable communities in their catchment areas, Mr. Baffoe added.

He observed that government recognises the immense contribution of RCBs in providing financial intermediation in rural centres, hence government entrusting them with disbursement of various credit schemes for farmers to support agriculture and other micro-productive activities in the rural areas.

Mr. Baffoe however stressed the need for RCBs to strengthen the capacity of their Board-members, shareholders and staff to meticulously understand financial transactions and their associated problems, particularly those peculiar to their operational areas, in order for the communities to derive maximum benefit from the banks.

He further entreated RCBs not to be phobic and anxious of the growing competition in the financial sector, but rather establish strong management mechanisms and adopt innovation business portfolios to face the competition especially posed by the universal banks’ infiltration into their catchment areas.