Rural banking in Ghana and its impact on rural farmers. Case study of the Birim South District, Ghana

Abstract

This study examines the impact of financial institutions, especially rural banks on rural farmers. It analyses the role rural banks play in agricultural development and food security of the Birim South District in the Eastern Region of Ghana. The aim of the research was to (1) evaluate the rationale of the introduction of rural banks in Ghana and their impact on the rural folks (especially farmers) (2) establish a link between rural banking and food security (3) understand constraints farmers face in their dealings with the bank. And to analyze the various ways the rural bank impact on the lives of the farmers. Questionnaires and interviews were used to elicit responses from 220 clients (mostly farmers) of the South Birim Rural Bank Ltd. The paper demonstrates that the rural bank has a positive impact on the people in terms of giving them something to fall on when times are hard translating into poverty alleviation and food security as well as financial advisory services.