Nair, AjaiFissha, Azeb2017-08-102017-08-102010-05https://hdl.handle.net/10986/27725This case study describes the history and business model of the Rural and Community Bank (RCB) network in Ghana, analyzes its performance, identifies key issues, and makes recommendations on the way forward. The study analyzes the service delivery and financial performance of the RCBs. Before the establishment of RCBs in the late 1970s and the subsequent expansion of other service providers into rural areas, access to institutional credit for farm and nonfarm activities was scarce. The main sources of credit were moneylenders and traders that charged very high interest rates. In many rural communities, secure, safe, and convenient savings and payment facilities hardly existed. The first RCB was established in a farming community in the central region of Ghana in 1976. Rural communities showed tremendous interested in the community ownership and management features of RCBs, and by 1984 the number of RCBs reached 106. The introduction of a check payment system for cocoa farmers also spurred the establishment of local banks in many communities. The financial performance of many RCBs started to decline, however, for several reasons, including a drought that affected the country in 1983, weak governing ability, conflicts within boards of directors, and ineffective management in many RCBs. By the end of 2008, 127 RCBs were in operation with a total 584 service outlets. RCBs are regulated by Ghana's central bank, the Bank of Ghana, and thereby form part of the country's regulated financial sector. RCBs are the largest providers of formal financial services in rural areas and represent about half of the total banking outlets in Ghana.en-USCC BY 3.0 IGOACCESS TO CREDITACCESS TO FINANCEADBAGRICULTURAL DEVELOPMENT BANKAGRICULTURAL FINANCEAGRICULTURAL SECTORAPEX BANKAUTONOMYBANK CREDITBANK MANAGEMENTBANKING NETWORKBANKING SERVICESBANKING SUPERVISIONBANKING SYSTEMBOARDS OF DIRECTORSBORROWERBUSINESS ASSOCIATIONSBUSINESS DEVELOPMENTBUSINESS DEVELOPMENT SERVICESBUSINESS PLANSCAPACITY BUILDINGCAPITAL ADEQUACYCAPITAL REQUIREMENTCAPITAL REQUIREMENTSCASH FLOWCASH FLOWSCASH RESERVESCENTRAL BANKSCOLLATERALCOLLATERAL REQUIREMENTSCOMMERCIAL BANKCOMMERCIAL BANKSCOMMERCIAL LENDINGCOMMERCIAL LOANCOMMERCIAL LOANSCOMMUNITY BANKCOMMUNITY BANKSCOMMUNITY DEVELOPMENTCOMPUTER TRAININGCONSOLIDATIONCONSULTING SERVICESCOOPERATIVESCORRUPTIONCREDIT CONSTRAINTCREDIT DECISIONSCREDIT HISTORYCREDIT LINESCREDIT MANAGEMENTCREDIT OFFICERCREDIT OFFICERSCREDIT POLICIESCREDIT PORTFOLIOCREDIT PORTFOLIOSCREDIT PRODUCTSCREDIT PROVISIONCREDIT RISKCREDIT UNIONCREDIT UNIONSCREDITWORTHINESSCREDITWORTHY BORROWERSCURRENT ACCOUNTSCUSTOMER SERVICECUSTOMER SERVICESDEBTDEPOSITDEPOSIT ACCOUNTDEPOSIT ACCOUNTSDEPOSIT BALANCEDEPOSIT BALANCESDEPOSIT INSURANCEDEPOSIT MOBILIZATIONDEPOSIT PRODUCTSDEPOSITORSDEPOSITSDEVELOPMENT BANKSDIRECT FINANCIAL SUPPORTDISTRESSED BANKSDONOR FUNDINGECONOMIES OF SCALEELIGIBILITY CRITERIAEMPOWERMENTEXPORT EARNINGSFARMERSFINANCIAL ANALYSISFINANCIAL EDUCATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL LITERACYFINANCIAL MARKETFINANCIAL PERFORMANCEFINANCIAL REFORMSFINANCIAL RESOURCESFINANCIAL SERVICE PROVIDERSFINANCIAL SUPPORTFINANCIAL SUSTAINABILITYFIXED ASSETSFIXED CAPITALFORMAL CREDITFORMAL FINANCIAL INSTITUTIONSFORMAL FINANCIAL SERVICEFORMAL FINANCIAL SERVICESGROUP GUARANTEEGROUP LENDINGGROUP LOANGROUP LOANSGUARANTORSHIGH INTEREST RATESINCOME TAXINDIVIDUAL ENTREPRENEURSINDIVIDUALS WITH BANK ACCOUNTSINFORMATION SYSTEMSINFORMATION TECHNOLOGYINSTALLMENTINSTITUTIONAL SUPPORTINSURANCE POLICIESINTEREST RATEINTERNAL CONTROLSINTERNATIONAL BANKLACK OF ACCESSLENDING REQUIREMENTLENDING REQUIREMENTSLENDING TECHNIQUESLIQUIDATIONLIQUIDITY RISKLOANLOAN AMOUNTSLOAN APPLICATIONSLOAN APPROVALSLOAN DEFAULTLOAN FUNDLOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRODUCTLOAN PRODUCTSLOAN RECOVERYLOAN REPAYMENTLOAN SIZELOCAL FINANCIAL INSTITUTIONSMFIMFISMICRO ENTREPRENEURSMICRO FINANCEMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMICROFINANCE LOANMICROFINANCE LOANSMINIMUM BALANCESMONEY LAUNDERINGMONEY TRANSFERMONEY TRANSFERSMONEYLENDERSMORTGAGENET WORTHNONPERFORMING LOANSNUTRITIONOPERATIONAL RISKOUTREACHOVERDRAFTOVERDRAFTSPAYMENT SERVICESPERFORMANCE ANALYSISPOOR CLIENTSPOOR CREDITPRIVATE FUNDINGPROFESSIONAL QUALIFICATIONSPROFIT MARGINPROFITABILITYPRUDENTIAL REGULATIONSPUBLIC INVESTMENTREPAYMENTREPAYMENT CAPACITYRESERVE REQUIREMENTRESERVE REQUIREMENTSREVOLVING FUNDRISK MANAGEMENTRURAL BANKRURAL BANKINGRURAL BANKSRURAL BRANCHESRURAL CLIENTSRURAL CREDITRURAL FINANCERURAL FINANCIAL INSTITUTIONSRURAL FINANCIAL SERVICERURAL FINANCIAL SERVICESRURAL FINANCIAL SYSTEMSAVINGSSAVINGS ACCOUNTSAVINGS ACCOUNTSSAVINGS PRODUCTSAVINGS PRODUCTSSCHOLARSHIPSSCHOOL BUILDINGSSMALL FARMERSSMALL LOANSMALLHOLDERSMALLHOLDER FARMERSSMALLHOLDERSSOCIAL DEVELOPMENTSOCIAL RESPONSIBILITYSOLVENCYSOURCES OF CREDITSUBSIDIARYTAX SAVINGSTECHNICAL ASSISTANCETECHNICAL SUPPORTTIME DEPOSITSTREASURY BILLSUNIVERSAL BANKSURBAN AREASURBANIZATIONVILLAGEVILLAGESWORKING CAPITALWorking PaperWorld Bank10.1596/27725