At the 23rd Biennial General Meeting (BGM) of the Association of Rural Banks (ARB) in Kumasi, National President Mr. Eric Danin reiterated the urgent need for the government to release locked-up funds owed to Rural and Community Banks (RCBs).
He highlighted the financial strain caused by the government’s financial sector clean-up and the Domestic Debt Exchange Programme (DDEP) which has resulted to the financial constrains in their industry.
A significant portion of RCBs’ funds remains inaccessible due to the financial sector clean-up and DDEP. This has severely impacted the liquidity and operational capacity of many member banks, undermining their ability to support rural economies effectively.
Mr. Danin pointed out that despite the government announcing a GH₵1.5 billion package to address issues arising from the financial sector reforms, RCBs were notably excluded from the bail-out. This exclusion has left RCBs struggling to maintain liquidity and sustain their financial obligations to clients and communities. Accordingly, Danin urged the government to immediately release these funds to the affected RCBs to cushion their operations and boost liquidity.
Mr. Danin appealed to the government to urgently release funds to the affected RCBs. He emphasized that doing so would cushion operations, enhance liquidity, and enable the banks to continue supporting rural development.
The locked-up funds and liquidity challenges have ripple effects on rural economies, where RCBs are often the primary financial institutions driving growth, credit access, and community development. Timely government intervention is crucial to restoring the financial health of these banks and ensuring they can fulfill their mandate of promoting financial inclusion and rural prosperity.
