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Micro Finance in Rural Ghana

Savings Workshop for G-lish Producers

The ability to save money is key to personal economic development. Savings serves as a safety net for families and households during emergencies and helps everyone to accumulate wealth that will support their lives.

G-lish Foundation held a savings forum on Friday, May 27, 2011 at the Dulugu Primary School for the women and youth involved in the G-lish Income Generating Project.

The main objective of the forum was to demonstrate the importance of savings and to show producers how they can begin to save themselves.

The forum, which was facilitated by Lennox from Nara Rural Bank, began at 3:30pm.

An official of Nara Rural Bank

The programme started with an opening prayer by one of the participants. Godwin, the Executive Director of G-lish Foundation, thanked the facilitator for accepting to facilitator the forum and then introduced him to the participants. They then introduced themselves to the facilitator one by one.

The facilitator thanked the participants for their interest in savings and then zoomed into his presentation.
He took the participants through several sub topics under savings. Some of these topics that were discussed are:
• Background of Nara Rural Bank;
• Types of accounts

Background of Nara Rural Bank

Lennox explained that the bank started in 2000 with only one branch in Paga and gradually grew up to four branches. These are Bolgatanga, Bongo, Navrongo and Paga.

Lennox also mentioned that the bank was set up to help rural farmers, traders, market women and women doing craft work with microcredit to enable them develop their businesses and earn income.
They give loans to individuals and groups who save with the bank and also undertake special projects.

Participants sharing a joke with the facilitator at the G-lish Savings Forum, 2011

Types of Accounts

The next topic that Lennox touched on was the different types of the accounts that the bank manages on behalf of individuals and groups

He explained that there are four main types of accounts that individuals can open at Nara Rural Bank:
1. Savings Account;
2. Current Account;
3. Fixed Deposits;
4. Group Account

G-lish producers at the Savings Forum, 2011

Savings Account

The savings account is an account where you lodge money periodically for future projects which also earn some interest. He said that you decide how much you want to save and how regularly you want to save. He also added that when you open a savings account you cannot access the money immediately but can do so the next day. He also said that every six months the bank works out the interest that has accrued to your money and adds it to your deposit.

He added that the minimum requirements for operating a savings account with the bank are:

I. 2 passport size photos;
II. A minimum deposit of GHC10.00
III. Filling a processing form

He also mentioned that you can always withdraw you money anytime you want.

Current Account

The current account does not accrue interest. He said that the current account is an account where you lodge money that you use to transact your business on daily basis. He also said that you can immediately access your money with the current account.

He mentioned the requirements for operating a current account with the Nara Rural Bank as:

I. 2 passport size photos;
II. A minimum deposit of GH₵10.00
III. Filling a processing form

He also said that with the current account you can sit at home and sign a cheque for someone to withdraw money for you. However, you cannot do that with the savings account. With the savings account you have to personally go to the bank to cash your money.

The Projects Officer of Nara Rural Bank facilitating the forum

Fixed deposit

Lennox explained that the fixed deposit is a special account that pays higher interest than savings account but imposes conditions on the amount and the frequency of withdrawals. He said that it is an investment tool that has a higher interest accruing to you as compared to the savings account. He also added that with the fix account you cannot access your money immediately but you can access it after a minimum of six months of operating the account.

Lennox mentioned that the fixed deposit was not relevant to the women at this stage and so did not go into the details of it.

Operating a group account

He explained you can operate an individual account, a joint account with two or more people, or a group account, which was more relevant to the weavers because they work as a group.
The group account has the advantage of using the mutual guarantee to secure loans from the bank. The bank encourages groups to operate a group account to enable them to access loans to help expand their economic activities. He encouraged participants to consider forms groups and added that if an individual wants to operate an individual account they could do so and still belong to the group account from which they could access a loan.

Requirements for opening a Group Account

Lennox said that to open and operate a group account with the Nara Rural Bank the following conditions must be met:
I. The group should have leaders: president, secretary, treasurer ,etc;
II. 2 passport sized photos of 3 of the leaders including the president, secretary and treasurer;
III. Filled a processing form;
IV. Deposit a minimum of GHC10.00

Questions time at the G-lish Savings Forum

Questions time

Lennox held a Q&A with G-lish producers after explaining each of the account types.

“Can we operate individual accounts as well?”

Yes. He added that with the individual accounts they cannot access loans from the bank except where they can provide a guarantee in the form of a fixed asset like land or where they can get someone who collects their monthly salary through the bank to sign as a guarantor for them.
Abane, a weaver asking a question during questions time, June 2011

“If you’re not interested in the microcredit or loans, can you open and operate an account with your bank?”

Lennox answered yes and added that you could open the account that you think suits your needs.

“If we operate a group account and I want to be saving more than the group can I do that?”

Yes. He added that you can open an individual savings account and save your extra money there. He also added that you can also save the extra money in the group account because when each member comes to the bank to deposit any money in the account it is recorded against the person’s name so you don’t lose anything by saving more than others in the group.

Time for participants to ask and answer questions at the G-lish Savings Forum, 2011

“What is your interest rate as a bank when one is borrowing?”

Lennox answered that their current borrowing interest rate is 25%. He added that their interest rate is not fixed; the prime rate of the Bank of Ghana determines the bank’s interest rate which means it rises and falls in line with the BOG’s rates.

Lennox gave a summary of his presentation and urged participants to form groups. He would then return and train groups to open and operate their accounts. He also thanked the participants for their attention.

Godwin then thanked Lennox for his presentation and also thanked the participants for their contributions which made the forum successful.

One of the participants then said a closing prayer after a beautiful hand clapping exercise by the participants as a sign of their appreciation of the efforts of the facilitator.

The forum ended at 5:30pm.

 

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