Strategic Imperatives for Rural Banks in 2023

The 2022 monetary yr will quickly finish and we can be ushered in a brand new yr. It is clear that some RCBs are excited as a result of they’ve achieved their goal whereas others are unexcited as a result of they might not obtain their set targets.

However, as vital as it’s to attain our goal for the yr, we should additionally recognize the truth that previous spectacular monetary outcomes are lagging indicators which don’t assure future success. We ought to due to this fact attempt for main indicators.

In gentle of this, the article will spotlight some strategic points that may assist the RCBs to stay sturdy and viable in 2023.

Regular Environmental Analysis

The RCBs operations may be affected by the exterior surroundings such because the technological surroundings and micro-economic surroundings.

It is due to this fact crucial that, RCBs undertake constant environmental evaluation to observe adjustments and tendencies in the macro-environment to identify doubtless alternatives and threats.

In so doing, our RCBs can harness their key strengths to use alternatives and techniques to mitigate threats in the exterior surroundings.

Management of our RCBs, also needs to have interaction in state of affairs constructing and are available out with contingency plan as we enter a brand new yr of financial uncertainty.

As a CEO or a key administration workers, have you ever taken the pains to learn and analyze the 2023 funds and coverage assertion to acquaint your self with the coverage route of the federal government subsequent yr? If the reply is not any then you will need to rapidly undergo to determine alternatives and threats that the funds assertion has for your trade.

Ensure Robust Credit Administration

Lending is a core perform of banks and due to this fact can’t be relegated to the background. However, it’s related to threat of default particularly in this turbulent financial surroundings the place some companies are struggling to remain afloat.

There are indications that the unfavourable financial situations are prone to proceed in 2023. Therefore, it’s essential for RCBs to enhance their credit score administration in order to mitigate credit score threat.

On this observe the next measures ought to;

Improve the standard of credit score appraisal
Ensure efficient mortgage monitoring via offsite and on-site
Capacity constructing of credit score Officers to assist replace their expertise and data of recent credit score administration methodology. Please don’t view coaching as a value however slightly as an funding.
Adopt efficient mortgage restoration technique.
Make use of credit score reporting system managed by credit score bureau, licensed by BoG to know the credit score historical past of mortgage prospects.
Fast-track mortgage supply course of and disbursement as a result of late disbursement of loans has the potential to have hostile impact on mortgage portfolio high quality.
Offer credit score officers enough remuneration to forestall them from succumbing to the lure of “loso”.

Adopt Customer Orientation

Customer oriented banks put prospects on the middle of all their actions and choices by making certain that they’re happy on the finish of the day. As we enter into the yr 2023 and past, ahead trying RCBs ought to stay buyer targeted as it may possibly drive buyer satisfaction, loyalty, advocacy and in the end enhance profitability.

It is critical to state that, there may be commoditization of banking services. In gentle of this, our RCBs ought to endeavor to construct emotional reference to their premium (key) prospects to wow them and in addition differentiate themselves. CEOs and key administration workers ought to keep away from armchair administration. Rather, they need to type the behavior of visiting key prospects to work together with them.

Implementation Of Strong Performance Management

We ought to keep in mind that glorious efficiency doesn’t occur by likelihood. Rather, it ought to be pushed.

To this finish, it’s important that our RCBs implement efficient efficiency administration that clearly talk to workers what is predicted of them in phrases of efficiency final result. Staff efficiency ought to be tracked and measured. It is value noting that efficient efficiency administration will maintain workers on their toes and never hang around anticipating to obtain wage on the finish of the month.

The Board also needs to signal efficiency contract with key administration workers and maintain them accountable.

Going ahead, administration of RCBs ought to hyperlink promotion and reward system to efficiency. This signifies that the traditional manner of selling workers based mostly on variety of years spent ought to be a factor of the previous.

Strengthen microfinance operations

I strongly advocate that RCBs ought to strengthen their microfinance operations as a result of that house gives a variety of alternatives and can also be profitable when issues are finished proper.

Scores of financial savings and loans and microfinance firms working in that ecosystem have seized operations due to the banking sector reforms. This has resulted in market hole which ought to be closed. Currently in Ashanti area, we have now solely 6 microfinance firms. The susu financial savings and loans that are integral a part of microfinance ought to be nicely packaged as they’ve the potential to grow to be money cow.

Mobile Bankers are drivers of susu product and due to this fact ought to be repositioned. In that manner, they’ll add professionalism to their work thereby enhancing efficient buyer interplay and cross-selling.

Conclusion

It is critical to state that, the factors mentioned up to now in the article usually are not exhaustive. Therefore, administration of RCBs who’re craving for extra info mustn’t hesitate to seek the advice of me.

Source: thebftonline.com