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Transcript of IT PROJECT
TABLE OF CONTENTSCHAPTER I.......................................................................................................................3
INTRODUCTION.........................................................................................................3
1.0 INTRODUCTION........................................................................................3
1.1 BACKGROUND TO THE STUDY............................................................4
1.2 STATEMENT OF PROBLEM...................................................................5
1.3 RESEARCH QUESTIONS.........................................................................6
1.4 RESEARCH OBJECTIVES.......................................................................7
1.5 JUSTIFICATION OF STUDY....................................................................7
1.6 METHODOLOGY.......................................................................................8
1.7 SCOPE OF STUDY.....................................................................................9
1.8 LIMITATION OF STUDY.........................................................................9
1.9 ORGANIZATION OF STUDY...................................................................9
CHAPTER II...................................................................................................................11
LITERATURE REVIEW............................................................................................11
2.0 INTRODUCTION......................................................................................11
2.1 History of ICTs adoption in banking in Ghana.......................................11
2.2 Benefits of ICTs adoption to business.......................................................12
2.3 Challenges of ICTs adoption in business..................................................15
2.4 Some working Definitions of Key Terms..................................................16
CHAPTER III..................................................................................................................24
METHODOLOGY......................................................................................................24
3.0 INTRODUCTION......................................................................................24
3.1 POPULATION...........................................................................................24
3.2 SAMPLING................................................................................................24
3.2.1. Sampling Method...................................................................................24
3.3 TYPES OF DATA......................................................................................25
3.4 DATA ANALYSIS AND TECHNIQUES................................................25
3.5 PRODUCTS OF THE RURAL BANK.....................................................26
3.5.1. Current Accounts....................................................................................26
1
3.5.2. Savings Accounts....................................................................................26
3.5.3. Fixed Deposit Accounts...........................................................................27
3.5.4. Salaried Workers’ Loan..........................................................................27
3.5.5. Farmers’ Loans.......................................................................................27
3.5.6. Commercial Loans..................................................................................27
CHAPTER IV..................................................................................................................29
DATA PRESENTATION ANALYSIS AND DISCUSSION......................................29
4.0 INTRODUCTION......................................................................................29
4.1 Adoption of ICT in Nwabiagya Rural Bank............................................29
4.2 ICTs adopted in Nwabiagya Rural Bank.................................................30
4.3 The Importance of ICTs in the bank........................................................30
4.4 Assessment of ICTs usage and support in the Nwabiagya Rural Bank. 31
4.5 Benefits of ICT in Nwabiagya Rural Bank...............................................37
4.6 Challenges to ICT adoption in Nwabiagya Rural Bank..........................40
CHAPTER V...................................................................................................................45
SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSION..........45
5.1 SUMMARY OF FINDINGS........................................................................45
5.1.1. Benefits derived when ICT is integrated into the operations of the rural bank 45
5.1.2. The extent to which the rural bank is reaping the benefits of ICTs.......45
5.1.3. The challenges encountered when integrating ICTs into the rural bank46
5.2 RECOMMENDATIONS...........................................................................46
REFERENCES................................................................................................................48
APPENDICES.................................................................................................................51
APPENDIX 1: QUESTIONNAIRE.........................................................................51
APPENDIX 2: RURAL BANKING IN GHANA....................................................52
2
CHAPTER I
INTRODUCTION
1.0 INTRODUCTION
This paper sets forth the benefits of successful adoption of Information and
Communication Technologies (ICTs) into rural banking and explores the
challenges posed in the quest to fully adopt ICTs into the banking operations. The
paper considers a case study of one bank as a means of understanding the real
issues on ground as regarding ICT adoption in rural banks.
Information technology (IT), as defined by the Information Technology
Association of America (ITAA), is "the study, design, development,
implementation, support or management of computer-based information systems,
particularly software applications and computer hardware". IT deals with the use
of electronic computers and computer software to convert, store, protect, process,
transmit, and securely retrieve information. 'Information Technology is a general
term that describes the technology that helps to produce, manipulate, store,
communicate, and/or disseminate information.
Nwabiagya Rural Bank Ltd. was founded in 1984 at Barekese where it has its
headquarters. It was then incorporated and issued a certificate to operate the
business of banking on June 4, 1987 but started operation on August 4, 1987
under the chair of Professor Kwame Arhin. Through well-focused direction and
planning, coupled with the well-motivated staff and enviable customers the bank
can now boast of five additional outlets located at Sagoe Lane-Adum, Offinso,
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Magazine, Bohyen and Abuakwa. Nwabiagya Rural Bank was rated the second in
the ranks of rural banks in Ghana after Atwima Kwanwoma Rural Bank in the
2009 ranking.
Yamajala Krishna Murty (Vice-President and Centre Head for Virtusa, India),
avers that over the last decade or so, IT has been central to the way organization
runs, and the current economic recession has reinforced IT to be the key business
enabler in an interview. (www.virtusa.com).
1.1 BACKGROUND TO THE STUDY
The introduction of ICT has had a dramatic effect on the banking industry and
employment patterns within it. ICT as a business enabler is slowly but surely
filtering its way into the corporate psyche. The fact that IT can transform
businesses in radically different and more effective ways is undisputed.
Rural Banks (RBs) in Ghana are unit banks owned by members of the rural
community through the purchase of shares and are licensed to provide financial
intermediation in rural areas of Ghana (Addeah, 1989). The RBs were set up
because of the failure of the traditional banks to provide banking services to the
rural community. In other words, financial support in the rural areas has largely
been problematic, despite the contribution made by rural sector to the socio-
economic development of the country. Over the years, the few commercial banks
that originally had branches in the rural areas have closed these branches due to
low profitability and the perceived risk of rural financing (Adom Adu-Amoah et
al, 2008). Thus according to Adu-Amoah et al (2008) RBs have served as the gap
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fillers in the area of banking as most of these rural banks are rather seeking higher
and a more profitable prospect.
It is therefore the need of this research to face out these problems facing rural
banks in Ghana via the adoption of ICTs into the operations of the banks.
1.2 STATEMENT OF PROBLEM
With the inception of technology in businesses since the past two decades, the
benefits of technology in businesses cannot be over-emphasised. The inception of
technology has remarkably changed the way businesses are conducted and
transacted all over the globe. Technology alone had not achieved much until its
integration with information and communication. This integration has highly been
accentuated by the knowledge-based environment the world has evolved into.
The promise of ICTs in the banking sector has been seen in terms of its potential
to increase customer base, reduce transaction costs, improve the quality and
timeliness of response, enhance opportunities for advertising and branding,
facilitate self-service and service customization, and improve customer
communication and relationship (Garau, 2002). A major facet when ICTs is
mentioned, is electronic business (e-business) which according to Basu and
Muyelle (2007) could reap two major benefits for organizations which are: value
creation and enhancement; and Cost minimization.
Nwabiagya Rural Bank, a leading ranking member in the grades of rural banks
has seen some of the benefits of ICTs adoption in rural banking since the
introduction of ICTs in May 2000 in their operations. It has yet higher prospects
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of fully computerised systems with extranets to other branches and vital external
alliances. The bank has not fully automated its systems as customers are not fully
incorporated in their ICTs strategy. Customers would rather have to visit the
branch where they hold their account before any transaction can be executed on
their account. Thus in spite of their place as the second in the current ranking of
rural banks in Ghana, it is faced with some challenges in their pursuit of a total
adoption of ICTs in all its processes.
The above benefits stated appertaining ICTs and e-business to business
enhancement, especially to the banking sector of other economies, could be a
reality in the rural banking sector of the Ghanaian industry if duly exploited in the
total or partial absence of the challenges faced. For ICTs to be full-fledged in the
Ghanaian economy, ICTs should be given the requisite attention. Harold et al
(1995) contend that it has become axiomatic that to remain viable in the 1990s
and the decades that follow, financial service providers must modify their
traditional operating practices.
It is, therefore, the objective of this paper to explore the challenges in adopting the
various ICTs in the rural banking sector of the banking industry as a means of
developing countermeasures to ameliorate or evade the challenges as much as
possible. This will then enhance the operations of rural banking.
1.3 RESEARCH QUESTIONS
What are the benefits that the rural bank derives when ICT is integrated
into their operations?
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What is the extent to which the rural bank is reaping the benefits of ICTs
adoption?
What are the challenges that the rural bank face when integrating ICTs
into their operations?
1.4 RESEARCH OBJECTIVES
The main objective of the research is to assess the extent of Information
Communication Technologies’ (ICTs) adoption into the operations of Nwabiagya
Rural Bank in Ghana. Below are the specific objectives:
To investigate the benefits derived when ICT is integrated into the
operations of the rural bank.
To assess the extent to which the rural bank is reaping the benefits
of ICTs.
To explore the challenges encountered when integrating ICTs into
the rural bank.
1.5 JUSTIFICATION OF STUDY
In this dynamic world of business where constant change can never be eluded,
businesses for that matter banks cannot, than to succumb to the mould of change.
The change has become very certain and more sporadic than we could have
estimated some years back especially with the inception of Information and
Communication Technologies (ICTs). Ghana, a developing country in the sub-
region of West-Africa, has recently been quickened to this breeze of change that
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blows all over the world. Banking, a fast-growing venture in a very high income
generating sector of the Ghanaian economy needs to be well abreast with and
squarely integrated into ICTs.
The paper also carefully selects a rural bank as a case study since it stands as a
promising sector of the banking industry in a time when Ghana seeks to
ameliorate if not eradicate poverty. These banks are important in the socio-
economic development of Ghana, as over 60% of the population live in rural
areas. The majority of these people are engaged in agricultural activities, which
contribute over 40% of the country's GDP and over 60% of employment
(Ameyaw, 2001). With 60% of the money supply outside the commercial banking
system, the rural banks, savings and loans companies, and the semi-formal and
informal financial systems play a particularly important role in Ghana’s private
sector development and poverty reduction strategies (Steel and Andah, 2004).
In a time when Ghana is much concerned about poverty alleviation and
enhancement of the per capita income of the general income levels, there is
therefore a need to channelize the ICTs resources into rural banking.
1.6 METHODOLOGY
The fundamental sources of data will be primary and secondary. The primary data
will be wholly captured from Nwabiagya Rural Bank through the administration
of questionnaires and semi-structured interviews with some key personnel of the
organisation. The secondary data will be collected from books, journals, internet
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and other research works on the subjects of ICTs adoption, rural banking and
business enabler.
1.7 SCOPE OF STUDY
The research topic supposes several ideas among which are – a proof of whether
or not ICT is a business enabler in the banking sector; the benefits of ICTs to the
banking industry; and the conditions that allow ICT to be a business enabler to the
banking industry. This research, however, rather seeks to assess the benefits and
the challenges posed in adopting Information and Communications Technologies
(ICTs) in the banking industry and propose realistic and workable solution to the
challenges set forth.
1.8 LIMITATION OF STUDY
This research confines itself to a case study of a rural bank in Ghana due to the
challenges posed in accessing relevant data for the research and financial
constraints. The bank for study is Nwabiagya Rural Bank due to their place in the
rungs of rural banks in Ghana. And also this bank has proven to be ICT minded as
it seeks to fully computerise its systems.
1.9 ORGANIZATION OF STUDY
The research will be organized into five main sections. These are the introduction,
literature review, methodology, the data analysis and the conclusions and
recommendations. The introduction captures the background of the study, the
research objectives and the scope of study. The literature review is a review of the
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current literature that bothers on the objectives of the research. The methodology
spells out how our data collected and from where it was collected. The data
presentation analysis and discussion is the analysis of the data collected in the
chapter three and finally, the chapter five gives the summary of findings,
recommendations and conclusion of the research based on the data analysis in
chapter four.
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CHAPTER II
LITERATURE REVIEW
2.0 INTRODUCTION
The previous chapter delineated the background, objective and scope of this study
among several other essential point of the research. This chapter sets forth the
various literatures on the objectives of this study as a means of shaping the study
to know where in the research on the subject this study can appropriately seek to
address. This chapter also reviews the literatures on some basic terminologies of
the research in order to afford a holistic understanding of the how the research
should be carried out.
2.1 History of ICTs adoption in banking in Ghana
In Ghana, the earliest forms of electronic and communications technologies used
were mainly office automation devices. Telephones, telex and facsimile were
employed to speed up and make more efficient, the process of servicing clients.
For decades, they remained the main information and communication
technologies used for transacting bank business.
Later in the 1980s, as competition intensified and the personal computer (PC) got
proletarian, Ghanaian banks begun to use them in back-office operations and later
tellers used them to service clients. Advancements in computer technology saw
the banks networking their branches and operations, thereby making the one-
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branch philosophy a reality. Barclays Bank (Gh.) and Standard Chartered Bank
(Gh.) pioneered this very important electronic novelty, which changed the
banking landscape in the country (Joshua Abhor).
2.2 Benefits of ICTs adoption to business
There is a dearth of literature that directly focus on the benefits of Information
and Communication Technologies (ICTs) to rural banking, however, there is quite
a chunk of information on the benefits of ICTs in itself and on businesses.
Agboola (2001) studied the impact of computer automation on the banking
services in Ghana and discovered that Electronic Banking has tremendously
improved the services of some banks to their customers. IT is becoming the
backbone of banks’ services regeneration in Ghana. Several authors have
conducted investigations on the impact of ICT on the banking sector of the Ghana
economy. Agboola et al (2002) discussed the dimensions in which automation in
the banking industry manifest in Ghana. They include:
(i) Bankers Automated Clearing Services: This involves the use of Magnetic Ink
Character Reader (MICR) for cheque processing. It is capable of encoding,
reading and sorting cheques.
(ii) Automated Payment Systems: Devices used here include Automatic Teller
Machine (ATM), Plastic Cards and Electronic Funds Transfer.
(iii) Automated Delivery Channels: These include interactive television and the
Internet.
12
Banks now offer customers the flexibility of operating an account in any branch
irrespective of which branch the account is domiciled. The first variable refers to
how banks have made new products and services available to customers. These
services include computerized credit ratings, programs that determine when
cheques should be made available to customers and daily calculation of
accounting balances. It also involves how various types of information technology
devices are made available.
Irechukwu (2000) lists some banking services that have been revolutionized
through the use of ICT as including account opening, customer account mandate,
and transaction processing and recording. Information and Communication
Technology has provided self-service facilities (automated customer service
machines) from where prospective customers can complete their account opening
documents direct online. It assists customers to validate their account numbers
and receive instruction on when and how to receive their chequebooks, credit and
debit cards.
According to Dr.Satchidananda Sogala (2004), financial institutions operating in
rural areas have an urgent need to deliver citizen services to the rural folks in a
cost effective way with assured quality. This involves mainly the following:
• Enabling the ready access at the place of the villagers
• Reducing transaction cost to make the services affordable
• Reduction in delays
13
• Improving the quality of services available
With all these expectations, in view the adoption of ICTs will enable the smooth
and lucrative operations of rural banking. According to Alu (2002), IT affects
financial institutions by easing enquiry, saving time, and improving service
delivery. In recent decades, investment in IT by rural banks has served to
streamline operations, improve competitiveness, and increase the variety and
quality of services provided.
ICTs can also act as an enabler for growth, development and competitiveness in
developing countries as suggested by speakers at an interactive debate among
government, private sector representatives and civil society on the role of ICTs as
an enabler for growth and competitiveness (www.unctadxi.org 10 July 2004
19:24). Several benefits have been noted from the literature and among them are
these:
i. Competitiveness,
ii. Cost minimization;
iii. Increased efficiency;
iv. Improved customer satisfaction;
v. Value enhancement;
vi. Improved quality in service delivery;
vii. Saves time in service delivery;
viii. Employee efficiency.
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2.3 Challenges of ICTs adoption in business
Notwithstanding the enormous benefit that is derived from the adoption of ICTs,
some major challenges have inhibited businesses and especially rural banks from
fully exploiting these benefits. The insufficiency of credible information on these
challenges has greatly handicapped the research from extracting enough
challenges from the reviewed literature. The most common ICT application used
by firms is automation of communications and none had conducted B2B or B2C
e-commerce. Some SMEs in transport services also consider that the Internet does
not suit their industry. A firm with 90 employees and an emphasis on personal
contact with clients decided not to adopt the Internet after a three-month trial of a
Web site (Mehrtens et al., 2001). Thus, a major challenge that has militated
against ICTs adoption is the nature of the operations of businesses and the
unsuitability of ICTs to the operations of businesses.
The primary objectives of RBs are to mobilize all available savings within the
catchment area, extend credit to rural areas and act as catalysts for rural
development by identifying and promoting rural development projects (Gallardo,
2002; Asiedu-Mante, 2001). The rural banks due to their operations require a high
degree of personal touch with the customers and that a great challenge is posed to
them in their quest to enhance adopt ICT that might sequestrate them from their
customers.
15
Most of the literature has reflected on the challenges posed to SMEs in their
adoption of ICTs but the challenges posed to rural banks have received little
attention in the research works.
SMEs generally lack the human technological resources needed for ICT and e-
commerce, because they focus on day-to-day operations and lack the time to
understand the benefits of new technologies. Even when they are aware of the
potential benefits of adopting e-commerce, they require expertise or qualified
personnel. The firms that adopt Internet and e-commerce are likely to have within
the firm someone who has a reasonable amount of knowledge of the specific
technology and/or technology in general. A study of small ICT companies with 3-
80 employees suggests that the Internet was adopted by firms with personnel who
understand the technology (Mehrtens et al., 2001).
2.4 Some working Definitions of Key Terms
Some key terms in the research has been reviewed to afford a succinct
understanding of the research objectives. These terms are: Information and
Communication Technologies, Rural Banking and Business Enabler.
Information and Communication Technologies (ICTs)
Information and communication technology (ICT) is the catchall phrase used to
describe a range of technologies for gathering, storing, retrieving, processing,
analyzing and transmitting information. Advances in ICT have progressively
reduced the costs of managing information, enabling individuals and
16
organizations to undertake information-related tasks much more efficiently, and to
introduce innovations in products, processes and organizational structures. ICT is
a generic name for all the technologies involved in communicating with
computers.
ICTs have been identified by many international development institutions as a
crucial element in developing the worlds' poorest countries, by integrating them
into the global economy and by making global markets more accessible. The
World Bank has collaborated with the International Finance Corporation to
promote access to ICTs, an initiative which it describes as one of its most
successful. In 2006 the United Nations launched an initiative called the Global
Alliance for Information and Communication Technologies and Development.
According to Yasuharu (2003), implementation of information technology and
communication networking has brought revolution in the functioning of the banks
and the financial institutions.
Many banks are making what seem like huge investments in technology to
maintain and upgrade their infrastructure, in order not only to provide new
electronic information-based services, but also to manage their risk positions and
pricing. At the same time, new off-the-shelf electronic services such as online
retail banking are making it possible for very small institutions to take advantage
of new technologies at quite reasonable costs. These developments may
ultimately change the competitive landscape in the financial services.
17
Bankers now see a kind of evolution in their business, partly, because the world
has taken a quantum leap in the use of technologies in the last several years. The
various electronic delivery channels used by banks are discussed below:
Automated Teller Machine (ATM)
Rose (1999), describes ATMs as follows: “an ATM combines a computer
terminal, record-keeping system and cash vault in one unit, permitting customers
to enter the bank’s book keeping system with a plastic card containing a Personal
Identification Number (PIN) or by punching a special code number into the
computer terminal linked to the bank’s computerized records 24 hours a day”.
Once access is gained, it offers several retail banking services to customers. They
are mostly located outside of banks, and are also found at airports, malls, and
places far away from the home bank of customers. They were introduced first to
function as cash dispensing machines. However, due to advancements in
technology, ATMs are able to provide a wide range of services, such as making
deposits, funds transfer between two or accounts and bill payments. Banks tend to
utilize this electronic banking device, as all others for competitive advantage. The
combined services of both the Automated and human tellers imply more
productivity for the bank during banking hours. Also, as it saves customers time
in service delivery as alternative to queuing in bank halls, customers can invest
such time saved into other productive activities. ATMs are a cost-efficient way of
yielding higher productivity as they achieve higher productivity per period than
human tellers (an average of about 6,400 transactions per month for ATMs
compared to 4,300 for human tellers (Rose, 1999). Furthermore, as the ATMs
18
continue when human tellers stop, there is continual productivity for the banks
even after banking hours.
Telephone Banking
“Tele-banking (telephone banking) can be considered as a form of remote or
virtual banking. It is essentially the delivery of branch financial services via
telecommunication devices where the bank customers can perform retail banking
transactions by dialing a touch-tone telephone or mobile communication unit,
which is connected to an automated system of the bank by utilizing Automated
Voice Response (AVR) technology” (Balachandher et al, 2001).
According to Leow (1999), telephone banking has numerous benefits for both
customers and banks. As far as the customers are concerned, it provides increased
convenience, expanded access and significant time saving. On the other hand,
from the banks’ perspective, the costs of delivering telephone-based services are
substantially lower than those of branch based services. It has almost all the
impact on productivity of ATMs, except that it lacks the productivity generated
from cash dispensing by the ATMs. For, as a delivery conduit that provides retail
banking services even after banking hours (24 hours a day) it accrues continual
productivity for the bank. It offers retail banking services to customers at their
offices/homes as an alternative to going to the bank branch/ATM. This saves
customers time, and gives more convenience for higher productivity.
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Internet Banking
The idea of Internet banking according to Essinger (1999) is: “to give customers
access to their bank accounts via a web site and to enable them to enact certain
transactions on their account, given compliance with stringent security checks”.
To the Federal Reserve Board of Chicago’s Office of the Controller of the
Currency (OCC) Internet Banking Handbook (2001), Internet Banking is
described as “the provision of traditional (banking) services over the internet”.
Internet banking by its nature offers more convenience and flexibility to
customers coupled with a virtually absolute control over their banking. Service
delivery is informational (informing customers on bank’s products, etc) and
transactional (conducting retail banking services).
As an alternative delivery conduit for retail banking, it has all the impact on
productivity imputed to telephone banking and PC-Banking. Aside that it is the
most cost-efficient technological means of yielding higher productivity.
Furthermore, it eliminates the barriers of distance / time and provides continual
productivity for the bank to unimaginable distant customers.
Business Enabler
Business enabler has not been a subject that has attracted the attention of most
researchers. However, some writers and researchers who have commented on this
subject almost agree that a suitable business enabler should enhance the
competitive edge of organizations in the industry within which they operate.
Among other advantages these researchers also concur that a business enabler
20
should be one that enhances the collaborative efforts of all factions of the
organization into one common goal or purpose. Pastemack and Viscio attest that a
business enabler has four main functions and they are:
a. Enabling the firm to become more distributed yet act as one;
b. Putting the capabilities in place for the right action to occur;
c. Enabling decisions that are in the interest of the corporation as a
whole;
d. Ensuring the right resources and skills exist for the company to
compete and grow.
Prakash Daya, an IT expert and head of LG Electronics Ltd. in India argues that
in today’s increasingly global competitive business environment, it is not enough
for the organizations to know where they want their business to go, but at any
given point they must know where they are. Organizations must plan faster and do
more with potentially less budget and resources. At the same time, they must be
incredibly efficient and more precise with every decision. Another specialist,
Yamajala Krishna Murty (Vice-President and Centre Head for Virtusa, India),
avers that over the last decade or so, IT has been central to the way organization
runs, and the current economic recession has reinforced IT to be the key business
enabler in an interview. (www.virtusa.com). He adds that technology
advancement has led to work mobility. In some industries, employees can now
work from home or any other with the availability of laptops, mobile phones and
internet connectivity. The coming of the Internet and the ongoing technology
21
advancements has seen a significant jump in productivity and efficiency in the
way an organization conducts its business.
The strategic use of IT systems helps an organization review and align
performance of various business functions with the organization’s strategy by
tracking and analyzing key performance index (statistics and goals) via end-to-
end integrated systems such as ERP, CRM, SCM, management dashboards and
early warning/alert systems. Thus by implementing above stated tools and
technologies, it provides organizations a platform for Enterprise Performance
Management (EPM) (Daya Prakash, IT head LG Electronics India Ltd, 2004).
Having EPM alone is not sufficient in today’s competitive world. The leading
organizations have put an effective Balanced Scorecard system in place. Typically
organizations would have a high level Balanced Scorecard Metrics which is
governed by the Corporate Planning function/department, in coordination with the
senior management. This would reflect Key Performance Indexes at an
organization level. These Key Performance Indexes are directly aligned to the
mission and vision of the organization. They are used by each functional
department to map with their respective departmental goals. Once these Key
Performance Indexes have been defined by each of the functional departments,
they are executed by means of coming up with clear strategies to attain identified
business goals. IT plays the role of a backbone for majority of performance
parameters implementation/execution (Daya Prakash, IT head LG Electronics
India Ltd, 2004).
22
The organization’s mission and vision are often converted into corporate goals
which are achieved through adoption of effective IT strategies. This clearly shows
how important IT is for the organization, both from IT as a core business as well
as business enabler/driver’s perspective (Daya Prakash, IT head LG Electronics
India Ltd, 2004).
23
CHAPTER III
METHODOLOGY
3.0 INTRODUCTION
The research seeks to explore the benefits that ICTs adoption hold in the
enhancement of business in the rural banking sector of the Ghanaian industry and
the challenges that are encountered in the adoption of the various forms of ICTs in
rural banking operation of Ghana. The paper also attempts to resolve the
challenges in order for rural banks in Ghana to fully exploit these benefits.
3.1 POPULATION
The population of the research is Nwabiagya Rural Bank and the bank has 5
branches in Kumasi with headquarters at Barekese. The workforce of the bank is (
twenty-eight (28).
3.2 SAMPLING
The sample size selected was one branch out of the five branches in Kumasi due
to the constraints of the research. This sample was the headquarters of the bank at
Barekese. Out of the population of 28 employees, 20 of them were sampled for
the questionnaires. 100% of this population responded to the questionnaires.
3.2.1. Sampling Method
The sampling method for this study was a non-probabilistic kind. The sampling
technique was therefore based on the convenience sampling. Further under this
technique the judgment sampling was most preferred. The upshot of the research
24
must therefore be reckoned with little caution as the external validity might have
been compromised due to the convenience sampling method rather than a study of
the entire population.
3.3 TYPES OF DATA
The data required for this research was primary and secondary data. The primary
data were gathered through the administration of questionnaires to key members
in the organization of study and semi-structured interviews conducted exclusively
with other experienced and well-resourced personnel in the field of ICTs. The
secondary data were collected through the reviewing of some journal articles,
books and largely from other research works of others.
3.4 DATA ANALYSIS AND TECHNIQUES
With the data we seek to analyze, it is primarily a qualitative data and thus
requires a qualitative analysis. According to Yin (1994), the ultimate goal of
analyzing data is to treat the evidence fairly, to produce compelling analytical
conclusions and to rule out alternative interpretations. Miles and Huberman
(1994) attest that data analysis is seen to consist of three concurrent flows of
activities that are data reduction, data display and conclusion drawing and
verification. Data reduction deals with the filtering of all data to focus on the
necessary data in order to make a conclusion. In this sense, data reduction refers
to the process of selecting, focusing, simplifying, abstracting and transforming the
raw data (Miles and Huberman, 1994). The display also ensures that the required
information filtered from the large pool of data is well organized in order to allow
25
for a reasonable conclusion. The results of this study are presented later in the
subsequent chapter.
3.5 PRODUCTS OF THE RURAL BANK
The rural bank like other rural banks serves their customers with several products
and among these are current accounts, savings accounts, fixed deposit accounts,
salaried workers’ loans among others. Below are descriptions of these accounts.
3.5.1. Current Accounts
A minimum of GHC 5 is accepted in opening a current account. A Customer will
have to provide one (1) passport size picture for processing the account. A Pay-In-
Book and a MICR cheque is then issued to the customer. No commission is
charged on the turnover of the account. Overdrafts and other loan facilities may
be granted to customers depending on upon operations and legibility.
3.5.2. Savings Accounts
The same minimum of GHC 5 is accepted for opening a savings current Account.
Customers provide one (1) passport size picture. A Savings Passbook is then
issued to the customer. Interest is a paid quarterly on the minimum balance
maintained within the period. Micro-enterprises loans and farmers’ loan may be
granted to customers depending upon operations.
26
3.5.3. Fixed Deposit Accounts
This is a fixed period of savings ranging from 3 months, 6 months and 12 months.
There shall be withdrawal until the end of the expiry period. A minimum of GHC
50 is accepted and in multiples of GHC 10. A certificate is issued to the customer
to specify the expiry period. Attractive interests are given on fixed deposits.
3.5.4. Salaried Workers’ Loan
Loans to salaried workers shall be granted where the employee collects his/her
salary through the bank. Employee is to operate with the bank for at least one (1)
month to qualify for salaried workers’ loans. Employers will have to undertake to
pay employee’s salary direct to the pay while he/she remains in employment. At
least one (1) salaried worker who collects his/her salary through the bank shall
guarantee the loan. Loans are to be repaid on monthly installment basis.
3.5.5. Farmers’ Loans
Loans to farmers are granted where farmers form groups and associations. At
least one (1) salary worker who collects his her/her salary through the bank is to
guarantee the loan. Loan is to be repaid in not more than 12 months.
3.5.6. Commercial Loans
These are overdraft and loan facilities granted to individuals, corporate groups,
enterprises and others in active business. Applicant has to be a loyal customer and
should operate a current account for not less than 6 months. Duration for
27
repayment of the loan shall not be more than 18 months. A customer is to provide
at least (1) salaried worker who collects his/her salary through the bank as a
guarantor. Customers are to provide at least 20% of amount required as security.
Repayment has to be on monthly installment basis or regular cash lodgments.
28
CHAPTER IV
DATA PRESENTATION ANALYSIS AND DISCUSSION
4.0 INTRODUCTION
This chapter consists of the analysis of the data collected for discussion and
presentation. It aims at primarily answering the research questions set out in the
chapter one. It also describes responses provided by Nwabiagya Rural Bank
Limited with the aim of finding out how I.C.T has been integrated into their
operations. Closed and open interviews and questionnaire were used. Charts were
employed to illustrate certain points where necessary. In all a population of 20
respondents were used.
4.1 Adoption of ICT in Nwabiagya Rural Bank
Table 4.1
Is your department computerized?Response Frequency Percentage
YES 17 85%NO 3 15%
TOTAL 20 100%Source: Field Work, May 2010
85% of the respondents answered yes to the above question while 3 respondents
representing 15% of the population answered negatively. It was realized that the
15% of the respondents were not using any ICTs in their operations. Their work
was to aid clients who could not read nor write in filling their forms. A greater
percentage had their department computerized and use one form of ICT in their
operations.
29
4.2 ICTs adopted in Nwabiagya Rural Bank
Table 4.2
What are some of the ICTs used in your operations?Response Frequency PercentageTelephone 18 90%Computers 19 95%Intranet 14 70%Internet 13 65%
Source: Field Work, May 2010
This table indicates that 90% of the respondents use telephones in their
operations. 19 respondents, indicating 95% used computers while 14 people,
representing 70% and 13 people representing 65% used intranet and internet
respectively in their operations. The researchers discovered that some of the
respondents used more than one ICT in their operations. Some used one, two and
three while others used all of the ICTs in performing their everyday operations.
4.3 The Importance of ICTs in the bank
Table 4.3
Why do you use ICT in your operations?Response Frequency PercentageSaves time 12 60%Company's Policy 5 25%Makes work easier 16 80%Because it is available 5 25%
Source: Field Work, May 2010
The study shows that more than half of the respondents (i.e. 12 respondents)
representing 60% indicates that they use ICTs in their operations because it saves
30
time, 25% use ICTs in their operations because it is a company’s policy. A greater
number of the respondents (i.e. 16) representing 80% stated that they used ICTs in
their operations because it made their work easier, 5 respondents indicating 25%
used ICT in their operations because it is available.
4.4 Assessment of ICTs usage and support in the Nwabiagya Rural Bank
Table 4.4
Has your work been made easier because of ICT?Response Frequency PercentageYES 18 90%NO 2 10%TOTAL 20 100%
Source: Field Work, May 2010
In response to the question above as displayed in the table above, 18 respondents
representing 90% agree that their work has been made easier because of ICT
whiles a very few (i.e. 10%) decline that their work has not been made easier by
ICTs.
Table 4.5
Every process in the bank should be computerizedPerception Frequency PercentageStrongly Agree 7 35%Agree 8 40%Undecided 3 15%Disagree 2 10%Strongly Disagree 0 0%TOTAL 20 100%Source: Field Work, May 2010
Figure 1
31
Source: Field work, May 2010
From the table 4.5 above, out of 20 respondents, 7 representing 35% strongly
agreed that every process in the bank should be computerized, 40% agreed to it,
15% were undecided as to whether to computerize all the bank’s operations or
not. 10% disagreed to the banks processes being computerized while no
respondent strongly disagreed to the statement. It can be further deduced that
majority of the respondents (i.e. 75%) would accept to all the banking processes
being computerized while a small percentage of 15 will object to the idea.
32
SUPPORT FOR TOTAL COMPUTERIZATION
Strongly Agree
Agree
Undecided
Disagree
Strongly Disagree
Table 4.6
What percentage of your colleagues do you think will support ICT?
Percentage Support Frequency Percentage
100% to 70% 17 85%
69% to 60% 1 5%
59% to 50% 1 5%
49% to 40% 1 5%
Below 40% 0 0%
TOTAL 20 100%
Source: Field Work, May 2010
Figure 2
Source: Field work, May 2010
33
INDIVIDUAL ICT SUPPORT
100% to 70%69% to 60%59% to 50%49% to 40%Below 40%
The table 4.6 represents the percentages of the colleagues that will support I.C.T
in the organisation. This has been categorized into 100% to 70%, 69% to 60%,
59% to 50%, 49% to 40% and below 40%.
In respect to what percentage, the respondents think would support I.C.T., 15%
would support I.C.T. between the percentages of 69% to 40%. 17 respondents
indicating 85% of the said colleagues would support I.C.T. between100% to 70%.
This confirmed that a majority number of the colleagues had the desire and
passion in supporting I.C.Ts in the organisation.
34
Table 4.7How would you rank support of ICTs in your organization?
Group Support Very High
% High % Moderate % Low % Very Low
% TOTAL % TOTAL
Management Support
11 55% 9 45% - - - - - - 20 100%
Staff Support 10 50% 7 35% 3 15% - - - 20 100%Client Support 5 25% 3 15% 2 10% 10 50% - - 20 100%
Source: Field Work, May 2010
Figure 3
Source: Field work, May 2010
35
Very High High Moderate Low Very Low-10%
0%
10%
20%
30%
40%
50%
60%
ORGANISATIONAL SUPPORT OF ICT
Management SupportStaff SupportClient Support
Ranking
Per
cent
age
Fre
quen
cy
From the above table, the answers to the question indicate that 11 out of 20
respondents (i.e. 55%) are of the view that management support of ICT in the
bank is very high and 9 representing 45% of the population are of the view that
management support of ICT was high.
With the staff support, half of the respondents (i.e. 50%) said that staff support
was very high, 35% said that staff support was high while 3 respondents
representing 15% of the population were of the view that staff support of ICTs
was moderate.
5 of the respondents (i.e. 25%) said that client support to ICT in the organization
is very high, 15% of the population said it is high, 10% , however, said its
moderate while a greater number of the respondents (50% of the population) said
client support of ICT in the organization is low. The reasons being that majority
of the clients were illiterates who had little or no knowledge in ICT; thus found it
difficult in using ICTs in their operations.
36
4.5 Benefits of ICT in Nwabiagya Rural Bank
Table 4.8
Response to benefits of ICTQuestion Strongly
Agree% Agree % Undecided % Disagree % Strongly
Disagree% TOTAL %
TOTALICT has improved effectiveness and efficiency
7 35% 12 60% - - 1 5% - - 20 100%
ICT has improved quality of work
12 60% 7 35% 1 5% - - - - 20 100%
ICT can potentially reduce cost of operations
9 45% 8 40% 3 15%
- - - - 20 100%
ICT has increased customer satisfaction
9 45% 10 50% 1 5% - - - - 20 100%
Source: Field Work, May 2010
37
Figure 4
Source: Field work, May 2010
38
Strongly Agree Agree
UndecidedDisagree
Strongly Disagree
0
2
4
6
8
10
12
14
ASSESSMENT OF THE BENEFITS OF ICT
Increase in customer satisfactionIncrease in quality of workReduction in cost of operationsIncrease in efficiency and effec-tiveness
Perception
Res
pons
e
From the above data, 35% of the respondents strongly agree that ICT has
increased efficiency and effectiveness in the organization, 65% agree and none of
the respondents said ICT does not increase effectiveness and efficiency. From the
above response it is blatant that the ICT increases efficiency and effectiveness.
60% of the respondents strongly agree that ICT adoption can increase the quality
of work, 35%, however, agree that ICT adoption can indeed increase the quality
of work leaving an undecided 5% on this benefit of ICT. With no respondent
disagreeing on this benefit of ICT adoption, it can be well accepted that ICT can
help increase the quality of work greatly.
The potential of ICT to reduce the cost of operations was strongly agreed to by
45% of the respondents, 40% of the respondents agree and an undecided 15%
were recorded. This indicates that the majority of the respondents affirm that ICT
has the potential of reducing cost in the organization.
With an undecided 5%, 50% agreeing and 45% strongly agreeing to the ability of
ICT to increase customer satisfaction, the respondents acquiesce to a large degree
that ICT can increase customer satisfaction. This indicates that in spite of the
undecided few, the majority of the respondents support this benefit of ICT.
39
4.6 Challenges to ICT adoption in Nwabiagya Rural Bank
Table 4.9
What percentage of your colleagues do you think will object to all processes being computerized?
Percentage Support Frequency Percentage100% to 70% 1 5%69% to 60% 2 10%59% to 50% 0 0%49% to 40% 2 10%Below 40% 15 75%
TOTAL 20 100%Source: Field Work, May 2010
Figure 5
Source: Field work, May 2010
40
INDIVIDUAL RESISTANCE TO ICT
100% to 70%69% to 60%59% to 50%49% to 40%Below 40%
In answering what percentage of the colleagues, they thought would object to all
process being computerized, 5% said between 100% - 70%, 2 respondents each
said between 60% - 69% and 40% - 49% respectively. 15 respondents indicating
75% said below 40% of colleagues would object to all process being
computerized. This signified that majority of the respondents indicated that they
would like all the process in the bank to be computerized s that their works would
be made easier and save precious time of clients and that of workers thereby
increasing productivity of the organisation.
Table 4.10
ICT is worth its high cost of installationPerception Frequency PercentageStrongly Agree 4 20%Agree 15 75%Undecided 0 0%Disagree 1 5%Strongly Disagree 0 0%TOTAL 20 100%
Source: Field Work, May 2010
From the analysis, 20% strongly agreed that I.C.T. is worth its high cost of
installation. Fifteen (15) respondents representing 75% agreed to this statement.
Only 5% of the respondents disagreed that I.C.T was worth its high cost of
installation. This confirms the organization reaps enough benefits proportional or
even more than the cost involved in the installation.
41
Table 4.11
In your opinion which of the reasons below indicate why the bank is not maximizing on ICT?
Challenges Frequency PercentageLack of Training 12 60%Lack of Infrastructure 3 15%Fear of Change 4 20%Lack of Support 1 5%Others 1 5%
Source: Field Work, May 2010
Figure 6
Source: Field Work, May 2010
In response to why the bank was not maximizing on ICT, 60% of the respondents
related this problem to lack o training. 15% of the population said lack of
infrastructure was the problem, 20% and 5% said fear of change and lack of
support respectively was the problem. One (1) respondent, however, said other
and gave a reason that the organization had training programmes for some of the
workers but stated this was inadequate.
42
Lack o
f Trai
ning
Lack o
f Inf
rastru
cture
Fear o
f Cha
nge
Lack o
f Sup
port
Others
02468
101214
ASSESSMENT OF ICT CHALLENGES
Response
Table 4.12
The major problems in the adoption of ICT are:
Response Frequency Percentage
High cost of installation 13 65%
Low computer literacy of clients 14 70%
Uncontrolled change in technology 7 35%
Source: Field Work, May 2010
Figure 7
High co
st of
insta
llatio
n
Low co
mputer
liter
acy o
f clie
nts
Uncontro
lled ch
ange
in te
chnolo
gy0%
20%
40%
60%
80%
MAJOR PROBLEMS IN ICT ADOPTION
Fre
quen
cy o
f P
erce
ntag
e
Source: Field Work, May 2010
Among the major problems or challenges identified in this study that adoption of
ICT were high cost of the installation, low computer literacy of clients,
uncontrolled change in technology.
43
An item was found out that 65% indicated high cost of installation that the
amount of money needed in computerizing the organisation. 70% indicated low
computer literacy of clients. This indicated a greater percentage because most of
the clients were illiterates, who found it difficult in adopting I.C.T fully.
4.7 Comments and Recommendations of Respondents
ATMs should be introduced as one of the bank’s ICTs to aid clients access
their accounts even after normal banking hours.
ICT education to the clients should be made more easier and
understandable in the banking industry.
More ICTs should be made available.
ICT has come to stay but not to replace human capital entirely.
All banking processes should be automated.
ICT has provided efficient and effective work but extranets has to be
introduced in order to be able to link up with other branches to access and
exchange information while at the work place without moving about.
ICT has come to save the lengthy time spent during manual work.
4.8 CHAPTER SUMMARY
From this chapter we presented the analysis of the data collected through
administration of questionnaires at Nwabiagya Rural Bank. The analysis was
presented in figures and tables where necessary in order to give a vivid picture of
ICTs adoption in the rural bank.
44
CHAPTER V
SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSION
5.0 INTRODUCTIONThis chapter sets out to round off the study with a summary work done and
recommendations as well as conclusion. The main objective of this research was
to assess the adoption of ICTs into the operations of Nwabiagya Rural Bank in
Ghana. The recommendations are drawn out of this study for further research into
the area of ICTs adoption into rural banking especially in Ghana.
5.1 SUMMARY OF FINDINGS
5.1.1. Benefits derived when ICT is integrated into the operations of the rural
bank
The data analysis indicates that there are benefits in the adoption of ICT into the
operation of Nwabiagya Rural Bank. These known benefits are increased quality
of work, increased customer satisfaction, reduced cost of operations and improved
effectiveness and efficiency.
5.1.2. The extent to which the rural bank is reaping the benefits of ICTs
The study indicates that 60% of the respondents agree or strongly agree to that
ICT increases efficiency and effectiveness and improved quality of work
respectively. To this extent Nwabiagya Rural Bank enjoys the benefits of ICT.
However, factors as lack of training inhibits a fuller reaping of the benefits of ICT
as indicated by the 60% of respondents in the analysis.
45
5.1.3. The challenges encountered when integrating ICTs into the rural bank
Factors such as high cost of installation, low computer literacy of clients and
uncontrolled change in technology are the major challenges in the adoption of
ICTs in Nwabiagya Rural Bank as indicated by the study. However, fear of
change was recorded from the response of 20% of the population as an inhibiting
factor to the adoption of ICT.
5.2 RECOMMENDATIONS
From the research, it has been well noted that the rural banks are not able to fully
enjoy the benefits of ICTs but the reaping of the benefits will leapfrog these
businesses into a higher pedestal of operational excellence and quality customer
service.
For the rural banks to enjoy fully the benefits in spite of the challenges, it is
suggested that the bank of Ghana and the central bank of rural banks in Ghana
(ARB Apex Bank) would step in to finance a private exchange network for the
rural banks for a fee. This will ensure a smooth running of operations of rural
banks especially in the area of customer service and thus will ensure a centralized
information system for the rural banks.
The rural banks would be better off in assisting their customers with automated
teller machines (ATM) linked up to the centralized information system if their
customers are provided with workshops to educate them on how to operate these
systems by themselves. This will ease the banking premise of the queues formed
and congestion especially during paydays for the farmers and other civil workers.
46
With these measures in place rural banks, a hub of rural development will achieve
fully its purpose of existence.
The area of rural banking however, touched has not been exploited fully but it is
yet an area that requires much attention especially in an era that Ghana seeks for
poverty alleviation and enhancement of the standard of living. The rural folks
who form a major section of the country’s population and an engine of growth
due to the farming activities should be given the requisite attention especially in
line with rural banking. It is therefore, recommended that a study be set up to
study:
The role of rural banking and ICTs adoption in national development in Ghana;
The exclusive benefits of ICTs adoption in rural banking in Ghana;
Assessment of the various ICTs in rural banking in Ghana.
`
47
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50
APPENDICES
APPENDIX 1: QUESTIONNAIRE
Below is a sample of the questionnaires administered at the Nwabiagya Rural
Bank.
SCHOOL OF BUSINESS
DEPARTMENT OF INFORMATION AND DECISION SCIENCES
QUESTIONNAIRE ON THE TOPIC: ICT AS A BUSINESS ENABLER IN THE BANKING INDUSTRY
1. Is your department computerized? YES ( ) NO ( )2. What are some of the ICTs used in your operations?
Telephone ( ) Automatic Teller Machines ( )Computers ( ) Internet ( )Intranet ( ) Others ( ) Specify ………………
3. Why do you use ICTs in your operations?Saves time ( ) Makes work easier ( ) Because it is available ()Company Policy ( ) Others ( ) Specify ………………………………………………………….
4. Would you like every process in the bank to be computerized?Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
5. Has ICT enhanced your way of work? YES ( ) NO ( )6. How would you rank support of ICT in your organization?
Very high High Moderate Low Very Low
a. Management Support ( ) ( ) ( ) ( ) ( )b. Staff Support ( ) ( ) ( ) ( ) ( )c. Client Support ( ) ( ) ( ) ( ) ( )
7. What percentage of your colleagues do you think will support ICT?100% to 70% ( ) 69% to 60% ( ) 59% to 50% ( ) 49% to 40% () Below 40% ( )
8. What percentage of your colleagues do you think will object to all processes being computerized?100% to 70% ( ) 69% to 60% ( ) 59% to 50% ( ) 49% to 40% () Below 40% ( )
9. Because they …
51
Lack training ( ) Lack of infrastructure ( ) Fear change ()Others Specify……………………………..…
10. ICT is worth its high cost of installation.Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
11. The major problem in the adoption of ICTs is:High Cost of installation ( )Low computer Literacy of clients ( )Uncontrolled change in technology ( )
12. ICT has increased customer satisfaction.Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
13. ICT has improved quality of work.Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
14. ICT has reduced cost of operations.Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
15. ICT has improved effectiveness and efficiency.Strongly agree () Agree () Undecided () Disagree() Strongly disagree ( )
16. Any comments you would like to provide.…………………………………………………………………………………………………………………………..………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
APPENDIX 2: RURAL BANKING IN GHANA
Rural Banks (RBs) in Ghana are unit banks owned by members of the rural
community through the purchase of shares and are licensed to provide financial
intermediation in rural areas of Ghana (Addeah, 1989). Thus, according to
Addeah rural banks as per its occurrence in Ghana belongs to the rural folks of the
community within which the rural bank (RB) is found and that its core operations
– financial intermediation – is channelized to rural areas.
52
Ghana has a population of about 18 million, which has been growing at about 3%
per year. Recent statistics (1999-2000) indicate that 63% of the population lives in
rural areas and 37% in urban areas. Gross domestic product (GDP) for 2001 at
current prices stands at US$5.36 billion, with an annual growth rate of 4.2%; per
capita GNP of US$390 remains lower than the average per capita income level of
US$520 for Sub-Saharan Africa (Gallardo, 2002).
These banks are important in the socio-economic development of Ghana, as over
60% of the population live in rural areas. The majority of these people are
engaged in agricultural activities, which contribute over 40% of the country's
GDP and over 60% of employment (Ameyaw, 2001). With 60% of the money
supply outside the commercial banking system, the rural banks, savings and loans
companies, and the semi-formal and informal financial systems play a particularly
important role in Ghana’s private sector development and poverty reduction
strategies (Steel and Andah, 2004). Thus, by a careful attention to this sector of
the economy, the poverty reduction strategy of Ghana will be attained and thereby
ensuring a middle-income status in no time.
They support development projects and provide employment opportunities in
rural areas (Adom Adu-Amoah et al, 2008). Due to all the predefined purpose of
RBs in the socio-economic development of Ghana especially the rural
communities there should be a commensurate attention to this sector of the
economy in order to ensure the realization of these anticipated benefits. The RBs
have contributed to improvements in banking culture, access to financial services
53
and household consumption patterns in rural Ghana (Gallardo, 2002; Asiedu-
Mante, 2001).
The idea of rural banking was conceived some 32 years ago by the Bank of Ghana
when it opened a dialogue with the Ministry of Finance about what was called
junior league of banking institutions to serve the special needs of the rural
population in Ghana (www. arbapexbank.com, 8/1/2010, 11:23 am).
The number expanded rapidly in the early 1980s in response to the demand for
rural banking services created by the government’s introduction of special checks
instead of cash payment to cocoa farmers. The small number of rural outlets of
commercial banks was woefully inadequate to meet the demand to cash these
checks, let alone provide other banking services, creating undue hardships on
farmers who often had to travel long distances or spend days at the banks to cash
their checks. More RBs and agencies were, therefore, hurriedly opened to help
service areas without banking facilities (Steel and Andah, 2004).
According to the ARB Apex Bank Ltd website the ARB Apex Bank Ltd is a mini
Central Bank in Ghana for the Rural/ Community Banks (RCBs) financed mainly
through the Rural Financial Services Project (RFSP), which is a Government of
Ghana project to holistically address the operational bottlenecks of the rural
financial sector with the aim of broadening and deepening financial
intermediation in the rural areas (www. arbapexbank.com, 8/1/2010, 11:23 am).
Thus the ARB Apex Bank Ltd stands as the main governing body of the rural
banks of Ghana.
54
At the time, the traditional licensed banking institutions were all structured,
equipped and managed as city-centered institutions with their clients mostly in the
export/import business and in the mining sector. It was, therefore, necessary to
bring the rural population into the banking system under rules designed to suit
their socio-economic circumstances and the peculiarities of their occupation in
farming and craft-making (www. arbapexbank.com, 8/1/2010, 11:23 am).
With over one hundred and twenty-five rural banks in the 10 regions of Ghana
since these 32 years according to the ARB Apex Bank Ltd website it could well
be concluded that rural banks operations have come to stay and should be given
the due cognizance in order to sustain its progress on the Ghanaian soil. Thus if
the due attention is given it would enhance the standard of living of especially the
rural folk since it will provide jobs for these communities. The Association of
Rural Banks (ARB) was founded in 1981 as an NGO with voluntary membership,
starting with 29 members and reaching 115 at end of 2001. The association was
formed out of the need “to promote and strengthen the rural banking concept”
(Steel and Andah, 2004). This is carried out through advocacy and training. Under
the Rural Finance Project, financed with a World Bank/IDA credit in 1991, and
with DANIDA assistance, ARB trained 2341 directors and 2559 staff members of
the RCBs (Osei-Bonsu, 1998). ARB has no statutory authority and influences its
members through persuasion and training seminars. The association initiated the
proposal for the ARB Apex Bank, licensed in 2001 to perform apex financial
services for RCBs and, eventually, to take over some supervisory and training
functions (Steel and Andah, 2004).
55
As the literature was reviewed on this key term, it came to bare that most authors
used rural banks (RBs) and rural community banks (RCBs). Thus all two terms
referring to unit banks owned by members of the rural community through the
purchase of shares and are licensed to provide financial intermediation in rural
areas. With the generic acceptance of the rural banking concept in Ghana coupled
with the need of the banks to diversify into other specialized areas than what it
had been known for initially especially in the field of Agriculture, hence the need
for a business enabler as Information and Communication Technologies (ICTs)
to enhance the operations of rural banks in Ghana.
56
No table of figures entries found.
57