CHALLENGES OF RURAL BANKING INDUSTRY IN POVERTY ALLEVIATION IN GHANA (A CASE STUDY OF ATWIMA KWAWOMA DISTRICT- ASHANTI REGION)

Abstract

This study aims at the challenges facing the rural banking industry in poverty alleviation in Ghana in the case of Atwima Kwawoma Rural Bank. One of the major problems facing the rural population in Ghana has been the lack of credit and saving attitudes. This has resulted in the inability to increasing productivity, income and improves upon basic standards of living of farmers. It is in the light of this that Bank of Ghana introduced the rural banking concept to meet the problems of the rural people and also to assist in the reduction of poverty in the rural communities. The objective of the study is to find out the effect of rural banking on rural communities which are mainly farmers and petty traders. To look at the effects of the operations of rural banking on rural communities with reference to the Atwima Kwawoma district in the Ashanti Region and also to educate and encourage the rural folks on the culture of savings. The simple random sampling method was adopted. The data was collected through questionnaires and interviews.

The main findings include: The financial supports received by the farmers were both beneficial to them and Atwima Kwawoma Rural Bank. The farmers were able to increase their yields and able to pay back their loans given to them by the bank.

It is recommended that; The government through the Apex banks should support rural banks effort in supporting and assisting agricultural development in Ghana. More workshops and seminars should be held to educate the communities about the credit activities and the importance of savings with the rural banks and the sort of risk the bank is exposed to as it advances credit to them without a collateral security.

In conclusion, financing farmers can help improve the living standard of the rural communities in Ghana. Therefore, the rural banks should be the main institutions in this course.