Ghana: Rural banks to launch an insurance company
The new company will come up with products that suits the particular needs of rural banks.The Association of Rural Banks has announced it taking steps to establish an insurance company that will cover high risk transactions.
Officials say the move is to ensure sustained rural banking amid growing competition from microfinance institutions.
The president of the association, Nana Akowuah Boamah, told Ghana Star that rural banks have been relying on mainstream insurance companies to secure loans and assets, adding to their cost while revenues sources dwindle due to the challenges in the economy.
The association believes that the new insurance company will be able to come up with products that suits the particular needs of rural banks, which face significant liabilities due to farmers often not being able to repay loans because crops have been damaged by drought or disease.
This better insurance cover is expected to help rural banks reduce their risk, which in turn should improve access to finance for farmers.