BUCO-Bank posts solid performance
The Builsa Community Bank Limited (BUCO-BANK) at Sandema in the Builsa North District of the Upper East Region is currently the only financial institution that has braved the odds to remain viable in a deprived district considered a "no-go area" for some financial institutions.
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Established 20 years ago, the BUCO Bank has never recorded losses and has also supported such sectors as education, health, agriculture, festivals, security services and infrastructure.
The idea of having a bank to serve the financial needs of the people in the district had been on the drawing board since the 1980's.The operation of the defunct Ghana Co-operative Bank was short-lived in the district as the bank closed down its Sandema Office in 1990 after less than four years in operations.
The Builsa North District Assembly had been wooing some financial institutions to open up branches in the area but such requests are usually turned down with the excuse that the district was not viable enough.
For so many years, the district was without a financial institution which seriously hampered the growth of economic activities. Farmers, local enterprises, civil and public servants had to travel several kilometres to nearby communities such as Navrongo and Bolgatanga to access financial services.
The late Sandema Nab, Dr Ayieta Azantilow, consistently trumpeted the need for the area to have a bank on every available platform that he had.
His perseverance paid off when the former Builsa District Chief Executive, Mr Daniel Syme, some prominent individuals, groups and associations worked tenaciously and got BUCO Bank incorporated as a limited liability company in April, 1996.
By October the same year, the head office of the rural bank was opened to customers.
Earlier in 1988, the first Interim Management Committee (IMC) was established but it failed to live up to its responsibility of mobilising the needed capital and assets for the establishment of the bank.
Another IMC was then established through the instrumentality of both the late Sandem Nab, Dr Azantilow and Mr Syme. They managed to get the Builsa District Assembly to pass a resolution for the setting up of a new IMC in November 1994.
This second IMC managed to mobilise cash amount of GH¢1,283 through the public sale of shares and GH¢1,728 in pledges as of August 20, 1995.
The late Sandema Nab decided to allocate the old Sandema lorry station for the BUCO Bank to put up its head office building and as such, the late chief convinced business owners and other individuals occupying the land to relocate which they did.
After satisfying all the conditions required by the Bank of Ghana (BoG) BUCO Bank received approval to start operations on October 16, 1996. The bank officially commenced operations in November 1996.
Growth and expansion
The BUCO Bank has since grown by leaps and bounds and currently has four branches at Sandema, Bolgatanga, Fumbisi and Yagaba.
It has for the past 25 years performed creditably and was rated as ‘strong’ in 2015 by the Efficiency Monitoring Unit of the ARB Apex Bank.
The rural bank has also met the mandatory minimum stated capital of GH¢500,000 for 2016 as directed by the BoG.
At its 16th Annual General Meeting held at Sandema last month, the Regional Manager of the Apex Bank, Mr Zinzendorf Pascal Nkulenu, said there was the need for the shareholders of the bank to buy more shares to help increase the bank's capital base to meet the mandatory requirement of the GH¢1 million set by the BoG for the year 2017.
Financial performance
The Board Chairman of the bank, Naab Akanab Apoom-Ween, said in spite of the general economic challenges last year 2015, the bank recorded a profit of GH¢708,621 before tax which represented a decrease from the previous year’s GH¢795,053.
He said during the year under review, BUCO Bank grew its balance sheet size by 30.5 per cent to close the year with an asset base of a little over GH¢18.62 million, propelled by a 75.8 per cent growth in short term investments as well as 54.1 per cent growth in property, plant and equipment investment.
The board chairman said customer deposits increased from GH¢10.46 million in 2014 to GH¢13.57 million in 2015 representing 29.7 per cent increase.
Achievements
BUCO Bank has over the years provided financial intermediation to more than 50,000 customers.
It was among the first 10 rural banks out of the over 132 rural banks in the country to be computerised in November 2010 under the support of the Millennium Challenge Account(MCA) spearheaded by the ARB Apex Bank due to its well balanced and credible records.
The general manager observed that "rigorous internal control systems" that was put in place by the management of the bank had protected depositors' funds and investments over the years.
The bank has over the years set aside five per cent of its profit after tax to execute its Corporate Social Responsibility (CSR) programmes in its operational areas. The bank spent GH¢21,943 in 2014 and GH¢46,152 last on CSR programmes in education, health, culture, environment and sports.
Way-Forward
In spite of the achievements of the bank, Mr Hayatudeen lamented the high loan default rate as well as the influx of microfinance institutions “that take away some of our valued customers and create mistrust in the financial sector as a result of fraud".
In order to consolidate the gains made for the past two decades, the bank intends to provide automated teller machine (ATM) services before the close of this year.
The bank was also considering improving its information and communications technology infrastructure, as well as come out with new products in microinsurance, while sharpening the capacity of its staff and strengthening its corporate governance structures.
