The need for the establishment of financial institutions in every district cannot be overemphasized. They provide both financial assistance in the form of loans and financial advice. They do not focus only on commercial banking but also provide merchant banking facilities. The Ejura Sekyedumase District can also boast of the existence of the under listed financial institutions:
The Ghana Commercial Bank (GCB). It is located in the Ejura town. Its main functions are to accept and give out loans to individuals who meet specific requirements. It also gives farmers/entrepreneurs financial advice.
The Agricultural Development Bank (ADB). It is also located in Ejura, the district capital. Its main roles are to give out credit facilities to farmers and traders in the district.
Sekyedumase Rural Bank. It is located in the Sekyedumase Township and has a branch at Ejura. It functions as providing loan schemes to farmers to help in increasing the size of their farms. It also helps in development projects in the district.
Kasei- Amantin Rural Bank. This bank is located in Ejura. It is also engaged in the provision of loan schemes to entrepreneurs.
Otuasekan Rural Bank. It is located in Ejura. It gives out credit facilities to farmers. It further assists in community development projects.
The mission of these financial institutions in the district is to help increase production and boost morale of entrepreneurs, and thus, giving out of loans, and financial advice. The functions of these institutions are meant to ensure the growth of the district as a whole.
Contribution of Banks to Credits
Each of the financial institutions located in the district has a proportion of credits it contributes to development in the district. It has a proportion it contributes to farmers, small and medium scale industries and to large scale enterprises. These are all geared towards attaining a higher level of development in the district. The proportions of loans paid to the enterprises are 12%, 43%, 36% and 9% to the Sekyedumase Rural Bank, the Ghana Commercial Bank, Agric Development Bank and Amantin-Kasei Community Bank respectively. This clearly shows that it is the Agriculture Development Bank that contributes highest in terms of credit facilities. The Amantin-Kasei Rural Bank is the least contributor to credits in the district. Proportions of loans received shows that farmers receive 57%, small and medium scale enterprises receive 17% and large scale enterprises receive 26% of the overall credit facilities. Thus, farmers are the group of people who receive most of the loan facilities in the district with large scale and small and medium scale enterprises in that order.
No sector of the economy can boast of the absence of development problems. Development problems hinder growth and development efforts. They need to be solved if development is really sought. The main development problems of the service sector are listed below:
Inaccessibility to credit facilities
Lack of organized associations often results in the inability to access credit facilities. Most of the entrepreneurs also lack the collaterals required by the banks. Further, the high interest rates on loans also hinder entrepreneurs from accessing the credit facilities offered by the banks.
Lack of expansion
The inability to expand the service sector is basically a result of the inaccessibility to credit facilities by the entrepreneurs. This has contributed to its inability to absorb majority of the unemployed.
As said earlier, there is the need to address development problems for the desired growth to be seen. It is in this light that suggested solutions for the identified development problems have been given. The suggested solutions are:
Increasing accessibility to credit facilities
The question of collaterals demanded by the banks has always been a problem. It is therefore recommended that banks re-assess their demands on customers and reduce their lending interests to make their loans easily accessible to enterprises.
To upgrade the skills of those in the service sector
Lack of adequate skills results in low efficiency which leads to low productivity. Upgrading the skills of those in the service sector will enhance their efficiency to enable them increase productivity.
Development potential represents or depicts the identified resources within the district that can be tapped to help in the solution of the identified development problems. The development potentials in the district are:
Existence of banks and other lending institutions
There are about five (5) banks in the district. The existence of these banks serve as a potential to the district since most of the people can have access to it in terms of loans, savings and financial advice.
Sparse distribution of lending institutions or banks
The banks in the district are fairly accessible within the district. Sekyedumase Rural Bank in Sekyedumase and Ejura, Amantin-Kasei Community Bank, Ghana Commercial Bank, Agriculture Development Bank and Otuasekan Rural Bank are all in Ejura. This help to easily extend their services to farmers and entrepreneurs in the various farming and communities.
A look at all the sectors of the economy show that, the agricultural sector is the greatest contributor to the economy in terms of the number of people employed in that sector. It has therefore contributed its quota in terms of reducing unemployment in the district. This is because of the availability of fertile and vast arable land in the district which supports crops cultivation. However, the average monthly income for the agricultural sector is the least among all the sectors. This shows that the agricultural sector in the Ejura Sekyedumase District is not a gainful employer. The industrial sector in the district includes agro and manufacturing industries. The size of the industries in the district is dominantly small. Mostly owned solely. Sole proprietorship ventures exist mostly in the district employing relatively small number of people. The source of finance is mostly from personal funds. This has accounted for the small size of industries in the district.
The service sector in the Ejura Sekyedumase District is the most lucrative sector earning the highest average monthly income among all the sectors of the economy. In terms of its contribution to reducing unemployment, the service sector has not contributed much since it employs only few people. The non-formal service type dominates the formal ones and therefore could be used to absorb the unemployed illiterates in the district if credit facilities are made accessible for expansion.
From the above deductions, the existing development problems of each of the sectors need to be addressed if growth and development is to be achieved. The given potentials could be used as essential resources in combating the problems. The service and industrial sectors could also be extended credit facilities to increase their size to absorb more of the unemployed. Efforts should also be geared towards the agricultural sector to increase its average monthly income since the population engaged in it is higher and therefore an increase in its average monthly income could affect more of the population.
For tables refer to pdf file attached