Rural Banks in Ghana: Trends in Automation

                                                       

1.   Trends in Investment in Automation by Rural Banks in Ghana

Eighty per cent (8 out of 10) of respondents agree that rural bank expenditure is on the rise. Seven out of this number felt the expenditures were worthwhile. Only one felt it was not worthwhile.

Table 11: Trends in Investment in Automation and Computerization by Rural Banks

Rural Banks	Expenditures on Automation (in US$)
	2011*	2012*	2013*	Mean Expenditure
Amenfiman Rural Bank	30,268.60	30,731.13	45,725.50	35,575.08
Dangme Rural Bank	27,088.77	24,240.96	32,360.67	27,896.80
Atwima Kwanwoma Rural Bank	23,214.48	20,442.27	29,912.57	24,523.11
Ga Rural Bank	20,855.22	17,452.84	23,354.56	20,554.21
Manya Krobo Rural Bank	17,828.15	17,314.97	23,279.74	19,474.28
Abokobi Area Rural Bank	13,801.12	13,662.05	18,787.00	15,416.72
Ada Rural Bank	6,206.71	13,430.40	18,374.92	12,670.68
Bawjiase Area Rural Bank	12,826.25	10,388.98	14,018.50	12,411.24
La Community Bank	10,619.16	9,821.64	14,333.70	11,591.50
Shai Rural Bank	4,924.74	9,262.20	13,732.78	9,306.57
Average Annual Expend. on Automation	16,763.32	16,674.74	23,387.99

*Dollar rates (year):1.530450 (2011), 1.8834 (2012) and 1.9986 (2013)

Table 11 above shows the expenditure trend on automation by the sampled rural banks. The rural banks shown in the table are arranged from the highest to the lowest in terms of expenditure on automation and computerization. The table above shows that Amenfiman Rural Bank expended the greatest amount of resources on automation, followed by Dangme Rural Bank, Atwima Kwanwoma Rural Bank and Ga Rural Bank. The bank with the least expenditure on automation was Shai Rural Bank. It is interesting to note that the bank (Amenfiman Rural Bank) with the greatest expenditure on automation was also the most technically inefficient. On the other hand, Shai Rural Bank, which recorded the least expenditure on automation, was also the most technically efficient. It therefore appears that size of banks plays a more critical role in determining efficiency than mere expenditure on automation. This observation seems to suggest that expenditure on automation does not automatically guarantee technical efficiency.

Data on automation expenditure for 2009 to 2010 was unavailable. This was probably because 2009 and 2010 were both pre-computerization periods. Banking operations were by the manual method; and, so it stands to reason that in 2009 and 2010 the rural banks expended very little or nothing on automation.

Table 10 above also shows that the mean technological change under the post-computerization period (2012/2013) was 1.349, meaning that productivity in 2013, most likely as a result of increased investment in automation, was higher in 2013 than in 2012; thus, indirectly supporting the assertion by respondents of increased investment in automation. This assertion is further supported from data in Table 11 above, which clearly shows that expenditure on automation in 2013 was greater than that in 2012. The general investment level in automation by the rural banks was 40% more in 2013 than that in 2012. However, in 2012, the average investment in automation dropped by 10%.