Contribution of the kakum rural bank to poverty reduction in the Komenda-Edina-Eguafo-Abrem municipality

Abstract

The study was designed to examine the contribution of Kakum Rural Bank (KRB) to poverty reduction in the Komenda-Edina-Eguafo-Abrem Municipality. All the four agencies of the KRB in the KEEA municipality were included in the study. The purposive, quota and systematic sampling techniques were used to draw 384 respondents, made up of staff and customers of Kakum Rural Bank, for the study. Structured questionnaires were used to collect data from respondents. Percentages, frequencies, graphs, charts as well as descriptive statistics were used to present the data. The results of the study revealed that KRB, with its financial and nonfinancial services, had helped in poverty reduction in the KEEA Municipality. The study further showed a significant improvement in customers’ income level; output level; savings level, ability to afford medical care; ability to cater for the educational needs of family; ability to afford good shelter; provision of nutritious food for family; and acquisition of assets/properties. Despite its contribution towards poverty reduction, KRB was faced with some challenges which included high loan default rate. On the other hand, some of the challenges faced by customers included low interest on savings and high interest rates on loans. Judging from the potential KRB has in reducing poverty, it is recommended that the bank should strengthen its loan recovery effort and expand its coverage in the municipality. Depositors should also receive realistic interest on their deposits. Interest rate on credit should also be lowered.