Rural banks in the country are to receive support from ARB Apex Bank through a partnership the latter entered into with the Danish International Development Agency (DANIDA).

Under the agreement, rural banks can access a capacity building support fund, a rural finance wholesale fund and merger fund.

Experts have hailed the initiative, which is expected to strengthen the rural banking industry to serve as the main vehicle for financial intermediation and capital formation in rural Ghana.

There are over one hundred and twenty-five rural banks across the country.

They provide financial services to rural folks to ensure growth in Ghana’s predominantly agro-based economy.

Rural banks undertake a mix of micro finance and commercial banking activities structured to satisfy the needs of the rural areas. They also provide banking services by way of funds mobilization and credit to cottage industry operators, farmers, fishermen and regular salaried employees.

They further grant credit to customers for the payment of school fees, acquisition/rehabilitation of houses and the payment of medical expenses, among others.

Some rural banks have subsidiary companies that are engaged in customer credit and other developmental activities.

Theophilus Obeng, Head of Microfinance Unit at ARB Apex Bank, who announced the projects, explained that the capacity building support was targeted at staff of rural banks.

Apex Bank is also supporting rural and community banks to employ university and polytechnic graduates from the localities to improve their human resource capacity.

Under the programme, Apex Bank would pay the salaries for the graduates in an initial period of attachment and training.

The Head of the Microfinance Unit said the Merger Fund would assist the rural banks to procure consultancy services while the rural finance wholesale fund was designed to accommodate activities that require loans whose tenure exceed 18 months but not beyond five years.

He therefore urged the rural banks to work hard to overcome their information and communication technology challenges, adding that a nationwide computerization and networking of rural and community banks, which started under the Rural Financial Services Project, was being implemented under the Millennium Development Authority.