Abstract:
The Bank of Ghana in 2009 increased the minimum stated capital of Rural and Community Banks from 50000 to 150000, however the Bank of Ghana gave specific deadline to meet this mandate. This requirement has become so important to boost the operations of the banks, improve their financial capacity and enable them fit in the rapidly changing banking industry.
The sector also has its peculiar inefficiencies that arise from clustering and in the nature of the banks. It has therefore become necessary for the sector to consider the financing option that will improve efficiently and strengthen their financials. This study explored the forming of mergers and acquisitions among rural banks in Ghana. The study found that mergers and acquisitions in the sector has become imperative to eliminate inefficiencies in the sector and increase their financial positions to serve the community better. Some of the challenges of mergers and acquisitions in the sector include high financial cost, social impediment and managerial impediment. The study reviews that successful mergers and acquisitions in the sector will need the support of regulating authorities, support fund, education of directors and shareholders. Gains from synergy, better internal control are some of the ways that mergers and acquisitions will improve the sector.
