Kotoko Peter David Research Onrural Banks in Ghana

8/6/2019 Kotoko Peter David Research Onrural Banks in Ghana

1/21

CAPE COAST POLYTECHNICCAPE COAST POLYTECHNIC

SCHOOL OF BUSINESS ANDSCHOOL OF BUSINESS ANDMANAGEMENT STUDIESMANAGEMENT STUDIES

RESEARCH ON RURAL BANKS INRESEARCH ON RURAL BANKS INGHANA.GHANA.


2/21

GROUP MEMBERSGROUP MEMBERS PETER DAVID KOTOKOPETER DAVID KOTOKO EUGENE SENANU DESEWUEUGENE SENANU DESEWU

AGARTHA KUKUA MENSAHAGARTHA KUKUA MENSAH

NAA AYORKOR AKRONGNAA AYORKOR AKRONG

TAMAKLOE RICHARDTAMAKLOE RICHARD

FAFALI GANTUAFAFALI GANTUA

SARAH TUFFOURSARAH TUFFOUR

ACHEAMPONG BOAKYE YIADOMACHEAMPONG BOAKYE YIADOM MATHIAS QUINOOMATHIAS QUINOO

VIVIAN TAKYIVIVIAN TAKYI

HELENA ASAREHELENA ASARE


3/21

TABLE OF CONTENTTABLE OF CONTENT

BACKGROUND OF STUDYBACKGROUND OF STUDY INTRODUCTIONINTRODUCTION

STATEMENT OF PROBLEMSTATEMENT OF PROBLEM

RESEARCH QUESTIONSRESEARCH QUESTIONS

RESEARCH OBJECTIVESRESEARCH OBJECTIVES

METHODOLOGYMETHODOLOGY

DATA ANALYSIS AND PRESNTATION OF FINDINGSDATA ANALYSIS AND PRESNTATION OF FINDINGS

SUMMARY OF FINDINGSSUMMARY OF FINDINGS CONCLUSION OF THE STUDYCONCLUSION OF THE STUDY

RECOMENDATOINSRECOMENDATOINS


4/21

INTRODUCTIONINTRODUCTION A rural bank is communityA rural bank is community--owned and the share capital raised by theowned and the share capital raised by the

people in the community. It is registered under the Companies Code ofpeople in the community. It is registered under the Companies Code ofGhana as a Limited Liability Company. It is licensed under the BankingGhana as a Limited Liability Company. It is licensed under the BankingLaw of Ghana by the Central Bank, the Bank of Ghana. The Bank isLaw of Ghana by the Central Bank, the Bank of Ghana. The Bank isgoverned by a Board of Directors elected by shareholders in Annualgoverned by a Board of Directors elected by shareholders in AnnualGeneral Meeting.General Meeting.

The concept of rural banking was conceived in the 1960s with the searchThe concept of rural banking was conceived in the 1960s with the searchfor a system to tackle the financial problems of the rural dwellers.for a system to tackle the financial problems of the rural dwellers.

The need for such a system was necessary because the biggerThe need for such a system was necessary because the biggercommercial banks could not accommodate the financial intermediationcommercial banks could not accommodate the financial intermediationproblems of the rural poor as they did not show any interest in dealingproblems of the rural poor as they did not show any interest in dealingwith these smallwith these small--scale operators.scale operators.

The first rural bank, Nyakrom Rural Bank Limited, was opened in AgonaThe first rural bank, Nyakrom Rural Bank Limited, was opened in AgonaNyakrom in the Central RegionNyakrom in the Central Region


5/21

BANKING STATISTICSBANKING STATISTICSYEARYEAR

19761976-- 19801980

19811981-- 19851985

TOTAL ESTABLISHEDTOTAL ESTABLISHED

+20+20

+86+86

TOTAL EXISTINGTOTAL EXISTING

2020

106106

19861986 19901990 +16+16 122122

19911991 19951995 +3+3 125125

19961996 19971997 +5+5 130130

19981998 19991999 +3+3 133133

20002000 20012001 --2323 11011019991999 -- 20002000 +5+5 115115

20012001 20032003 +2+2 117117

20042004 -- 20112011 +14+14 131131


6/21

STATEMENT OF PROBLEMSTATEMENT OF PROBLEM

Latest banking statistics provides that moreLatest banking statistics provides that morebanks are extending their branches to the localbanks are extending their branches to the localareas. This has resulted in a significant level ofareas. This has resulted in a significant level ofcompetition between the rural banks andcompetition between the rural banks andtraditional banks.traditional banks.

The major issue is that most local customersThe major issue is that most local customersprefer the traditional banks to the rural banks.prefer the traditional banks to the rural banks.

This has resulted in the rural banks loosing theirThis has resulted in the rural banks loosing theircustomers.customers.


7/21

RESEARCH QUESTIONSRESEARCH QUESTIONS

Why do people prefer traditional bank toWhy do people prefer traditional bank torural banks?rural banks?

Why are Rural Banks losing moreWhy are Rural Banks losing more

customers?customers?


8/21

RESAERCH OBJECTIVESRESAERCH OBJECTIVES

The general object of the research is to identify theThe general object of the research is to identify thereason why people prefer traditional banks to ruralreason why people prefer traditional banks to ruralbanks.banks.

Other specific objective includes: to find outOther specific objective includes: to find out

Why rural banks are losing customerWhy rural banks are losing customer

How rural banks can acquire more customers.How rural banks can acquire more customers. Attempt to offer suggestions and recommendations onAttempt to offer suggestions and recommendations on

finding on the research.finding on the research.


9/21

METHODOLGYMETHODOLGY

The source of data collection was primary andThe source of data collection was primary and

secondary.secondary.

The primary data was captured from a sample ofThe primary data was captured from a sample of

CC-- poly students and traderspoly students and traders through thethrough theadministration of questionnaire and semiadministration of questionnaire and semistructured interviews.structured interviews.

The secondary data was collected from books,The secondary data was collected from books,journals, internet and the research works.journals, internet and the research works.


10/21

METHODOLOGYMETHODOLOGY

A sample size of hundred people wereA sample size of hundred people wereselected from the population to respond toselected from the population to respond toa questionnaire.a questionnaire.

100% of the sample size responded to the100% of the sample size responded to thequestionnairequestionnaire

Simple random probability method wasSimple random probability method wasused in selecting the sample sizeused in selecting the sample size


11/21

SAMPLE OF THE QUESTIONNAIRE USEDSAMPLE OF THE QUESTIONNAIRE USED CAPE COAST POLYTECHNICCAPE COAST POLYTECHNIC

MARKETING DEPARTMENTMARKETING DEPARTMENT

QUESTIONNAIRE FOR A SURVEY ON WHY PEOPLE PREFER TRADITIONAL BANKS TO RURAL BANKSQUESTIONNAIRE FOR A SURVEY ON WHY PEOPLE PREFER TRADITIONAL BANKS TO RURAL BANKS.. This questionnaire is purely for academic work. All information provided will be confidential and will not be used for any otThis questionnaire is purely for academic work. All information provided will be confidential and will not be used for any otherher reason.reason.

1. Sex of correspondent. Male Female1. Sex of correspondent. Male Female 2. Age. 182. Age. 18--24 2524 25--30 3130 31--35 3635 36--40 Above 4040 Above 40 3. Are you employed? Yes No3. Are you employed? Yes No 4. If Yes, what is your occupation? ..4. If Yes, what is your occupation? .. 5. If No, are you a student? Yes No5. If No, are you a student? Yes No 6. Do you know about Rural Banks? Yes No6. Do you know about Rural Banks? Yes No

7. Do you have a bank account? Yes No7. Do you have a bank account? Yes No 8. If yes, were do you save?8. If yes, were do you save? Rural Bank Traditional bank bothRural Bank Traditional bank both 9. Which bank do you save? .9. Which bank do you save? .

10. If Rural bank, do you like their services? Yes No10. If Rural bank, do you like their services? Yes No 11. If No, which part of their services needs to be improved? ..11. If No, which part of their services needs to be improved? .. .. .. .. 12. Why save in that particular bank? .12. Why save in that particular bank? . .. .. 13. Why do you prefer a traditional bank or a rural bank?13. Why do you prefer a traditional bank or a rural bank?

14. If you dont have a bank account, were would you like to open one?14. If you dont have a bank account, were would you like to open one? Rural Bank Traditional bank bothRural Bank Traditional bank both 15. Why would you open an account with a Traditional bank or a Rural bank?15. Why would you open an account with a Traditional bank or a Rural bank? ........................ .... THANK YOU.THANK YOU.


12/21

DATA ANALYSIS AND INTERPRETATION OF FINDINGSDATA ANALYSIS AND INTERPRETATION OF FINDINGS

FROM SAMPLEFROM SAMPLE

GENDERGENDER FREQUENCY FREQUENCY PERCENTAGEPERCENTAGE

MALEMALE 4848 48%48%

FEMALEFEMALE 5252 52%52%

TOTALTOTAL 100100 100%100%


13/21

AGE RANGE OF SAMPLEAGE RANGE OF SAMPLE

AGE RANGEAGE RANGE FREQUENCY FREQUENCY PERCENTAGEPERCENTAGE

1818--2424 4949 49%49%

2525--3030 2121 21%21%3131--3535 1111 11%11%

3636--4040 1010 10%10%

ABOVE 40ABOVE 40 99 9%9%

TOTALTOTAL 100100 100%100%


14/21

OCCUPATION STATUS OF SAMPLEOCCUPATION STATUS OF SAMPLE

SAMPLE SIZESAMPLE SIZE FREQUENCYFREQUENCY PERCENTAGEPERCENTAGE

STUDENTSSTUDENTS 5858 58%58%

WORKERSWORKERS 4242 42%42%

TOTALTOTAL 100100 100%100%


15/21

BANKS ACCOUNT STATUS OF SAMPLEBANKS ACCOUNT STATUS OF SAMPLE


PEOPLE WITHPEOPLE WITH

BANK ACCOUNTBANK ACCOUNT

8181 81%81%

PEOPLE WITHOUTPEOPLE WITHOUTBANK ACCOUNTBANK ACCOUNT

1919 19%19%

TOTALTOTAL 100100 100%100%


16/21

BANK STATUS OF SAMPLE SIZEBANK STATUS OF SAMPLE SIZE


PEOPLE WITHPEOPLE WITHRURAL BANKRURAL BANK

ACCOUNTACCOUNT

1010 12.4%12.4%

PEO

PLE WITH

PEO

PLE WITHTRADITIONALTRADITIONAL

BANK ACCOUNTBANK ACCOUNT

5959 72.8%72.8%

PEOPLE WITHPEOPLE WITH

ACCOUNT INACCOUNT INBOTHBOTH

TOTALTOTAL

1212

8181

14.8%14.8%

100%100%


17/21

SUMMARY OF FINDINGSSUMMARY OF FINDINGS

From our study we found out that 81 of ourFrom our study we found out that 81 of our

sample size have bank accounts, 19 do notsample size have bank accounts, 19 do nothave bank accounts. Out of the 81, 10 havehave bank accounts. Out of the 81, 10 havebank accounts in Rural banks, 59 inbank accounts in Rural banks, 59 in

Traditional banks and 12 in both banks.Traditional banks and 12 in both banks.

This proves that customers prefer traditionalThis proves that customers prefer traditional

banks to Rural banks. Below are the reasonsbanks to Rural banks. Below are the reasonsstated by the sample size.stated by the sample size.


18/21

REASONS WHY THE SAMPLE SIZE PREFERREASONS WHY THE SAMPLE SIZE PREFER

TRADITIONAL BANKS TO RURAL BANKTRADITIONAL BANKS TO RURAL BANK

Traditional banks have more branchesTraditional banks have more branches

Traditional banks offer better services, such as: internetTraditional banks offer better services, such as: internetbanking, payment of bills and money transfers.banking, payment of bills and money transfers.

Traditional banks are more customer oriented.Traditional banks are more customer oriented.

Traditional banks provides Automated Teller Machine (ATM),Traditional banks provides Automated Teller Machine (ATM),which the rural banks do not.which the rural banks do not.

Large sums of money cannot be cashed instantly at RuralLarge sums of money cannot be cashed instantly at Ruralbanks, unless prior notice is given.banks, unless prior notice is given.

Rural banks are more liable to liquidation.Rural banks are more liable to liquidation.

Prestige.Prestige.


19/21

CONCLUSION OF THE STUDYCONCLUSION OF THE STUDY Rural Banks were established to help manage the financesRural Banks were established to help manage the finances

of people in the rural areas. Latest statistics provides thatof people in the rural areas. Latest statistics provides thatTraditional banks are also extending their branches andTraditional banks are also extending their branches andservices to the rural areas. This has created a form ofservices to the rural areas. This has created a form ofcompetition among them. It has also resulted in the ruralcompetition among them. It has also resulted in the ruralbanks loosing their customers to the traditional banks. Frombanks loosing their customers to the traditional banks. From

our study we realize the following reasons can account forour study we realize the following reasons can account forthe problem.the problem.

Traditional banks have more branches.Traditional banks have more branches.

Traditional banks offer better servicesTraditional banks offer better services Traditional banks are more customer orientedTraditional banks are more customer oriented

Easy access of money through ATM serviceEasy access of money through ATM service

Traditional banks provide modern standard of banking.Traditional banks provide modern standard of banking.

Large sums of money cannot be cashed.Large sums of money cannot be cashed.


20/21

RECOMMENDATIONSRECOMMENDATIONS Based on the findings of the research, the followingBased on the findings of the research, the following

recommendations are made.recommendations are made.

Rural banks should open more branches or network withRural banks should open more branches or network withother rural banks all over the countryother rural banks all over the country

Rural banks should improve their services by adoptingRural banks should improve their services by adoptingmodern standard of banking.modern standard of banking.

They should also improve their customer service byThey should also improve their customer service bymaking customers the centre of their activities.making customers the centre of their activities.

The bank of Ghana should increase the bank reserve ofThe bank of Ghana should increase the bank reserve ofrural banksrural banks

Rural Banks should provide Automated Teller MachinesRural Banks should provide Automated Teller Machines

(ATM)(ATM)


21/21

....

THANK YOUTHANK YOU

Documents

Kotoko Peter David Research Onrural Banks in Ghana