Amenfiman Rural Bank Plc is set to scale up support to small and micro-scale enterprises with loan support of up to one million cedis to clients.
This is aimed at boosting the local capacity of indigenous businesses and improving the local economy.
CEO of the Bank, Dr. Alexander Asmah, says the Bank is leveraging on strong ties with clients, instead of collateral in accessing the loan.
“Collateral is what banks have relied on in granting loans but we have realised that there is nothing important than understanding their businesses and how they run them,” he said.
Dr. Asmah added, “What about our staff visiting the clients every day, get to have conversations about their businesses and offer expert services. With that, they are able to take payments on daily basis for the loans”.
Last year, the Bank launched the “AMERB Donkomi Promo” which targeted the disbursement of 500 million cedis to about 2,500 small and medium enterprises in two years.
It offered up to GHs400,000 to support small and micro-scale enterprises.
According to management of the Bank, between August and December 2024, over two hundred million cedis was disbursed in the first leg of the promo.
All the amounts disbursed in the period were retrieved fully, opening the Bank up for an upscale of the promotion.
“With our advisory services, the clients are now able to do the minimum book keeping to help us monitor what they do in their businesses. We have a team with them, for those who have understood our arrangements, why don’t we give them the next leverage,” Dr. Asmah said.
He added, “The Risk Committee of the Bank has assessed the risk, the Board has reviewed the risk assessment and we are comfortable to say that we can manage the risk of certain ones within the maximum range we have now put it.”
Risk Management
Lending to SMEs is considered high risk due to poor bookkeeping culture.
By the close of 2024, Amenfiman Rural Bank recorded a non-performing loans ratio of 1.7 percent, below the Central Bank’s ratio of 24.3 percent.
In the period, they operated a collateral free loans scheme.
The operation of the “AMERB Donkomi Plus”, which has pegged the maximum amount offered at a million cedis, will come with enhanced risk management practices.
Dr. Asmah explains the Bank’s staff working with the SMEs will enhance their support to ensure loans secured are dedicated to its objective.
“We are going to be much more closer to these clients and we are going to see what exactly they are using the money for. There is no room for diversion, overstocking, or anything outside what we have agreed to do,” he said.
Dr. Asmah added, “Getting close to the customer is more powerful than collatorals, the way to Empower the informal sector is to build stronger relationships with them and get them to pay their loans on daily basis. Some if them if they fail to meet their repayment by a day, they want us to understand why they couldn’t pay.”
Collaboration with Development Bank Ghana.
Amenfiman Rural Bank is in collaboration with the Development Bank of Ghana to grant long-term loans to manufacturing, hospitality and agribusiness industries.
Information Communication Technology and other modern businesses in IT are among the areas of interest.
This will be at least a five-year term project with a moratorium of about six months.
Women and youth will be the focus of the module.
Ahead of the introduction, the Development Bank is building the capacity of the staff of the rural bank, and helping with the improvement on the knowledge of long-term lending.
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