Abstract:
Merger is where two or more companies decide to combine their activities and
to organize a common control of the assets. This study focused on
investigating whether mergers are viable options for raising capital for banks
to finance their operations, improve their performance and expand their
capacity into new areas. The main objective of this study is to assess merger as
a financing option to develop the Rural and Community Banking industry,
with specific emphasis on the newly merged Gomoa Community Bank Ltd.
The study took place among staff of the Gomoa Community Bank (a merger
product of three Rural Banks within the Gomoa District in the Central Region
of Ghana: Gomoa Rural Bank, Apam; Gomoa Ajumako Rural Bank; Afransi
and Eastern Gomoa Assin Rural Bank; Gomoa Dominase). Seventy employees
submitted their responses for analysis; 50 males and 20 females. The modal
age range was 26-35 years. Majority of the employees were diploma and first
degree holders. 54.29% and 51.43% of respondents indicated that, there are no
change in advances to Gross Advances and earning asset to total asset ratio
respectively. However, 48.58% of the employee stated that the merger led to
increase in paid up capital. The main challenges to the merger were fear of
staff retrenchment, membership of the board and appointment of General
Manager. Based on the responses received, it became evident that the quality
of human resource at Gomoa Community Bank Ltd has improved.
Recommendations: A holistic involvement of stakeholders through education.
Gomoa Community Bank Ltd. is to put in place proper policies and strategies
to ensure proper external, internal control and regulatory compliance in order
to stay in business.
