THE ROLE OF RURAL AND COMMUNITY BANKS IN THE PROVISION OF MICRO CREDIT IN FISHING COMMUNITIES IN GHANA: A CASE STUDY OF LA COMMUNITY BANK

Abstract

This dissertation reports the findings of a study investigating the Role of Rural and Community Banks (RCBs) in the provision of microcredit to fishing communities in Ghana by using La Community Bank (LCB) microfinance programme. Data for the study were collected from a sample of 66 respondents using structured questionnaires and interviews. Stratified sampling technique was used in the selection of respondents. Data collected was first coded and ana lysed with the use of Statistical Product and Services Solutions (SPSS) software) currently renamed PASW - (Predictive Analysis Software). Tables and charts were used to present frequency distribution and interpretations made to show the role played by microcredit in the socio-economic development of fishermen and fishmongers in fishing communities. The study revealed that microcredit has the ability to reduce poverty in its clients when the products given to clients were incorporated with training, supply of equipment, and regular monitoring. The research also found out that beneficiaries face some challenges in their access and utilization of the LCB services and these include; small amounts of money disbursed, diversion of funds, high interest rates, low returns on investment, short grace periods, unfavourable repayment schedules and risk of property confiscation by LCB. The Community Bank did face some challenges and these are default in payment, relocation of beneficiaries etc. The recommendations are that MFls should provide insurance products to their clients. Secondly, they should organise training programmes in records keeping, credit management, and marketing, and also a management seminar. Officers of MFls should intensify monitoring every week on their clients. The mode of repayment should be flexible for the beneficiaries of microloans. Finally, MFIs should encourage their clients to formalise their businesses.