Rural Banking in Ghana and Its Impact on Rural Farmers. Case Study of the Birim South District, Ghana

Afful, Cleland F; Hejkrlík, Jiří; Doucha, T.

doi:10.5539/ass.v11n25p101

Cited by 6 publications

(9 citation statements)

References 8 publications

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“…In Figure 1, show simulated profitability SDE model performance of RCB's over the period to assess the trend of company's ability to earn profits from its sales or operations, balance sheet assets, or shareholders' equity. The series however exhibited cyclic movements which are cycles of rising and falling from initial time point zero (0) to one (1), data values that do not repeat at regular intervals. Such oscillatory movements of time series often have the duration of more than a Business Cycle.…”

Section: Model Simulationmentioning

confidence: 99%

“…Banks serve as financial intermediaries that accept deposits from customers and use them in the form of loan facilities to deficit spending units in the economy [1] In Ghana, the business of banking remains one of the most lucrative industries despite increasing competition and in the attempt to remain competitive; banks are exposed to several factors which can affect their profitability [2]. One of the key players in the Ghanaian banking industry is the Rural and Community Banks (RCBs) to fast track the development of rural areas of Ghana.…”

Section: Introductionmentioning

confidence: 99%

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Modelling and Simulating Dynamics Efficiency of Rural-Community Banks (RCBs) in Ghana

Gidigah¹,

Acquah²,

Tetteh³

2022

OJMSi

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The present work seeks to develop a model for measuring efficiency of RCBs in Ghana by means of financial key performance indicators pairing macroeconomic indicators. A stochastic differential equation model for predicting the efficiency of RCBs in the future is developed and simulated using gaussian jumps to evaluate the models' performance in unpredicted situations with four distinct phases of efficiency. Unique solution Exit multiple 4-dimensional stochastic differential equations and Macroeconomic model is proven to be the best-fitting model for the data with the lowest information criterion.

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Section: Model Simulationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Modelling and Simulating Dynamics Efficiency of Rural-Community Banks (RCBs) in Ghana

Gidigah¹,

Acquah²,

Tetteh³

2022

OJMSi

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“…The result of the study revealed that major limitations or challenges in accessing agricultural credit as found in the report include; high interest rates, bureaucratic bottlenecks, late approval of loans, unnecessary request for guarantors and collateral. Also, Afful et al (2015) examined the impact of financial institutions, especially rural banks on rural farmers. The result showed that farmers in the area enjoy the services of the bank and the bank itself has made significant impact on their lives not just only through the disbursement of credit or as something to fall back on when their income source is low but that it has had a high effect on output, income, savings and labour force.…”

Section: Literature Reviewmentioning

confidence: 99%

Challenges and Prospects of Commercial Bank Loan Extended to Farmers in Lagelu Local Government of Oyo State, Nigeria

Opeyemi

Oluwafemi

Ogundipe

et al. 2019

Asian Development Policy Review

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The study investigated the challenges and prospects of commercial bank loan extended to farmers in Lagelu Local Government of Oyo state, Nigeria. The methods used include descriptive statistics, binomial logistic regression analysis with multinomial logit regression. The result of the binomial logistic regression revealed that the variables that determine farm output are age, household size, hired labour, marital status, number of loan applications, amount of loan collected, off-farm income and interest rate on loan. Also, the multinomial logit regression analysis revealed that the variables that determine cassava crop production are hired labour, number of loan application and amount of loan collected, amount of loan collect and off-farm income determine rice production in the study area, interest rate on loan was the only variable that determine potatoes production, household size, and farming experience are the only variables that determine the production of maize in the study area, while farm size determine the output of groundnut production in the study area. The study recommended that since loan is one of the avenues that farmers can increase their farming output which will product the growth of gross domestic product, government agency should instruct commercial banks to direct more loans to agricultural activities. Farmers should not give up in applying for loan because at the end of the day, they will be surely granted and interest rate on loans given to farmers by commercial banks should be lower in other to encourage them to borrow more. Contribution/ Originality: This study contributes in the existing literature by investigating the challenges and prospects of commercial bank loan extended to farmers in Nigeria. The study make used of two methodologies which are binomial logistic and multinomial logistic regression. The past study only look at how banks loan affect farm output but this was also done in this research but the study go further by looking at how banks loan affect cassava crop production, rice production, potatoes production, maize production and groundnut production which has not been done before in the study area.

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“…Many publications focused on either the regional context of the country in addressing the significance of rural banks while others focused on the crop subsector at large. For instance, Kadri, and Afful et al [10,11] evaluated the importance of rural banks in Ghana and come to a conclusion that the agriculture sector was deprived of working capital as compared to the other sub-sectors of the economy. The limitation of these studies is their inability to identify an export earning crop and point out the importance of rural credit in its productivity.…”

Section: Introductionmentioning

confidence: 99%

Evaluating the Impact of Rural Finance on Cocoa Farmers Productivity: A Case Study of Bodi District in Ghana

Attipoe

Cao

Opoku-Kwanowaa

2020

AJAAR

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Background: Agricultural finance from rural and community banks play a major role in increasing both yield and income of rural farmers in agricultural-dependent economies. These finances are needed for purchasing raw materials, paying labor fees and buying farming equipment, etc. However, substantial evidence about their roles in improving farm productivity is lacking, especially in the cocoa sector in Ghana, where rural and community banks are the forerunners in advancing credit to cocoa farmers in Ghana’s deprived rural cocoa-growing communities. This research, therefore, seeks to determine the impact of rural and community banks’ credit on cocoa farmers' productivity in the Bodi District of Ghana. Methodology: Using random sampling method, a cross-sectional data of 350 cocoa farmers from 5 operational areas (Afere, Bodi, Amoaya, Kama and Suino) located in Bodi District in the Western region. The data were analyzed using descriptive statistics and logistic regression models. Statistical software (SPSS v20 and STATA v14) were used to analyze quantitative data on cocoa productivity. Results: The results revealed that cocoa farmers with access to credit experienced significant yield increase (p<0.05) with a mean of 359.71 kgha-1 as compared to 235.30 kgha-1 for non-credit takers. Further, only 34.3% of farmers accessed credit for farming. With Pseudo R2 value of 0.78, farm tenure system, fertilizer use, access to credit and access to extension services significantly influenced cocoa yield, while the age of cocoa farmer, age of farm trees and vulnerability of farm to natural disaster negatively affected cocoa yield. Tukey HSD results (p<0.00) indicate that rural banks credit allocations to non-agricultural activities such as trade and transport, and social loans had the highest percentage means which suggests that agriculture is treated less favorable in rural banks' credit portfolio. These findings give credence to the assertion that rural banks are deviating from their core mandate of supporting agriculture in Ghana. Conclusion: This study reaffirms the supporting roles played by rural and community banks in increasing cocoa yield in Ghana. However, this research recommends that, the Bank of Ghana should closely monitor the activities of these unit banks to reduce the instances of diverting all their funds to non-agricultural related activities.

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Rural Banking in Ghana and Its Impact on Rural Farmers. Case Study of the Birim South District, Ghana

Cited by 6 publications

References 8 publications

Modelling and Simulating Dynamics Efficiency of Rural-Community Banks (RCBs) in Ghana

Modelling and Simulating Dynamics Efficiency of Rural-Community Banks (RCBs) in Ghana

Challenges and Prospects of Commercial Bank Loan Extended to Farmers in Lagelu Local Government of Oyo State, Nigeria

Evaluating the Impact of Rural Finance on Cocoa Farmers Productivity: A Case Study of Bodi District in Ghana

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