Divesrsification Key to sustainability and growth in the Banking Business—Bank Manager

Financial Expert, Mr. Samuel Affum also the compliance manager for Akumadan rural bank has admonished colleagues in the banking sector to take a cue from the havoc wrecking many businesses by the coronavirus pandemic in order to survive any future misfortune.

According to him, many banks are fond of issuing concentrated loans to specific customers instead of diversifying to enable them to recover profit loss should there be any crises in some areas as recorded during the COVID-19 era.

This to him among other factors contributed to his bank’s ability to withstand the wave of business collapse whilst swerving the hard effect witnessed by many banks in the country during the period.

Mr. Affum disclosed this in an exclusive interview with Cruz News at his office in Akumadan to ascertain how the global pandemic has affected the bank.

He noted that some banks in the country experienced a significant drop in profit as much as 60% in the year 2020 due to the impact of COVID-19 and their inability to spread their wings in terms of loan offers.

“Some banks I know suffered a lot, because they put in more loans and was expecting the money back but had a drop of about 60% ” we also gave out more loans anyway but fortunately for us, we managed to recover and had as low as 15% profit loss which is insignificant and this is because we spread our wings across in giving out loans.

…This should also serve as a lesson to the banks not to focus on only one sector in terms of loans giving, there are some who have made it a policy of serving say only farmers, only this group loan and so the moment failure occurs at that sector, you find yourself in crises. but we gave it across to customers in farming, teaching, nursing, etc and so it couldn’t have a significant impact on us”, He indicated.

The banker noted also a major effect the pandemic had on our GDP due to the suffocation of many industry sectors such as manufacturing, mining, electricity, agric among others experienced which according to research contribute about 60% to Ghana’s GDP growth and thus remain very important to our economy

Mr. Affum, therefore, slammed our leaders for not demonstrating pragmatism in their leadership roles as prudent measures ought to be put in place at all times to contain any unexpected misfortune as a country.

He cited the health sector as one of his bases as facilities lacked enough structures and equipment to accommodate and treat patients of the disease.

He said it was enough a signal to our duty bearers to always expect the unexpected by acting ahead of any unwanted happening.

“This should send a signal to our lawmakers our regulators that they must always ensure pragmatic or prudent measures are put in place, they should always expect the unexpected, we need solutions to current situations. just look at how the health sector was affected, at some point, we lacked facilities to even accommodate some of the COVID patients so the disease in a way has helped in awakening our governments to priorities provision of those amenities”

He added, “it has again helped security-wise making the security operatives especially those at borders vigilant, sometimes we hear allegations of bribery at the borders on the part of the guards allowing all manner of people into the country who potentially inflict us with all these troubles”.

Acting General Manager Mr. Yahaya Hamidu who confirmed sustainability and growth of the Akumadan Rural Bank in spite of the pressure from the pandemic said the bank before the inception of the COVID-19 as a community-owned had gained the people’s trust and mileage in the Offinso North and beyond.

According to the manager, the bank since its establishment in 2017 keeps flourishing due to some effective strategies and energy employed by management in the market to gain customer confidence which has yielded results positively.

He said although few hitches such as deposits drop, inspected purchase of PPEs were recorded, the bank’s performance in entirety was not affected much by the impact of the disease which he attributed partly to the low cases recorded in the Offinso North district challenges faced by the bank include lack of trust by potential customers because of the banking crises especially from 2017 when it was emerging, few loaners who refuse to pay back money given to them as loans.

Source: Modern Ghana

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