IMPACT OF RURAL BANKS ON FARMERS; A CASE STUDY OF OFFINSO MUNICIPALITY DISTRICT

Abstract

Up to 1963, there were five main banks providing credit for economic activities in Ghana. These banks were mostly in the urban centers with specialized operations from that of many rural dwellers. Rural dwellers were known to be relatively poor and could not provide the collaterals that were needed by these banks and were therefore denied access to credit. Rural banks were therefore set up to catalyze rural development and serve as institutional vehicles for poverty reduction in various rural communities. This study therefore examined the impact of rural banking on farmers in Ghana. The research seeks to access farmers on how to access credits from banks. Although, there are three rural banks in the Offinso Municipality, farmers face difficulty in accessing credit. The researchers were poised to know more of the challenges farmers in the Offinso Municipality face in accessing credit from rural banks in the Municipality. Also we seek to identify some of the causes why rural banks in the Offinso Municipality do not offer credit to farmers and also identify other competitors for credit in the Offinso Municipality.The simple random sampling procedure was used to select fifty (50) farmers and three (3) rural bank staffs for the research. We used both questionnaires and interviews to get data for the research. Statistical Package for Social Scientists (SPSS) and Microsoft Excel software were used for the data analysis. Primary data was gained from the rural bank staffs and some farmers. The secondary data were collected from the Rural Bank Offices in the form of journals and other periodicals as well as from other literature by some authors on the related subject. v From the research, it was found out that the rural banks actually grant credit facilities but farmers have an intense competition in the accessing of credit. The researchers also found out that the unavailability of credit to farmers tends to have an adverse effect on the development or growth of farmers affecting their economic activities. The researchers therefore recommended that Rural banks should be client – oriented to effectively monitor the farmers after they are given credit facility. The study is a five chapter piece of work.