The Deputy Governor of the Bank of Ghana, Mr. Milisson Narh, has urged banks to adopt innovative technology and turn to branchless banking in order to reduce their marginal costs of operations and increase their customer base.

Branchless banking involves the delivery of banking services outside conventional bank branches, often using non-bank agents and relying on information and communication technology (ICT) -- typically to transmit transactions, for card-reading, and the use of mobile phones and terminals.

“The expansion of financial services through branch networking comes with some costs. Banks are therefore enjoined to develop new products and services using appropriate technology to reduce their marginal costs of operations, and increase its customer base to reap economies of scale.

“Banks may also turn to branchless banking in general, and mobile money in particular -- which are cheaper means of extending financial services,” he said. Mr. Narh was speaking at the official inauguration of Energy Bank Ghana Limited’s Spintex Road branch in Accra.

Inaccessibility of remote areas and overhead cost associated with establishing branches nationwide are some key challenges that branchless banking is expected to remedy. Presently, it costs about US$500,000 to put up a standard branch of a bank.

A 2010 World Bank report said 70 percent of the Ghanaian population does not have a bank account -- not only because of poverty, but also because of the travel distance and the amount of paperwork involved.

Mr. Narh is concerned about the high cost of borrowing in the country. He said: “I therefore encourage banks to price their lending in a way that supports economic activity and growth, as well as the continued expansion of the banking industry.”

Mr. Sam Ayininuola, the Managing Director/CEO of Energy Bank, debunked the notion that the bank is only focused on the energy sector. “The ‘energy’ in our name represents vitality, strength, vigour and dynamism that we deploy in our dealings with customers. It is about doing things better, doing things never done before; it is about creative innovation.”

The Chairman of Energy Bank Ghana, Dr. Jimoh Ibrahim, said the bank will offer holiday jobs to fifty university students during long vacations.

“Engaging students during long vacation will help them gather some funds for school and also enable management make a very through and fair assessment of these students; and by the time they complete and wish to work with the Bank, there will be very little training to do.”

In barely a year of operation, the bank with its headquarters located at GNAT Heights currently has eight branches nation-wide. It plans to have ten branches across the country by close of the year.

The bank is also looking at increasing its capital base from the initial GH¢60million to about GH¢100million to place it in a pole-position to finance big-ticket transactions.

The bank’s products include the Energy Temple and Energy Kid accounts. Energy Temple is an operational current account linked to an interest-bearing investment account with churches as its target focus, whilst Energy Kid is aimed at encouraging parents to save for their children as well as inculcate in children the habit of saving.