For a rural bank, switching from paper to computerized transaction processing and record keeping isn’t just a leap forward in technology. It also cuts costs, improves security and more quickly puts money in the hands of customers.
As part of the recently completed five-year, $547 million compact with Ghana, MCC helped digitize over 600 branches of 130 banks in remote communities throughout the country through the Ghana Compact I Rural Development Project’s Financial Services Activity. MCC’s $27 million investment in this particular activity provided the necessary infrastructure to enable internal transaction processing and reporting. In addition, the investment funded the installation of satellite dishes and rented satellite space to help banks improve headquarters-to-branch communications, communicate electronically with the national regulator and connect to the country’s payments grid.
MCC also funded the creation of a central data center at the national regulator and a remote disaster recovery site to ensure records and other data wouldn’t be lost.
Many of these banks serve farming communities, the core group who benefit from Ghana’s MCC compact. Bank customers have already seen the average time needed for a check to clear drop from seven days to two, and banks can offer a wider range of services including handling direct remittances and wire transfers.
The Government of Ghana can also more effectively distribute pensions and payments for the goods it purchases from farmers, like cocoa.
MCC’s investments are a win for the banks, too. Before, a disaster could wipe out most of their records, but the new system includes redundancies that more effectively protect data. Banks can also now more effectively access centralized information like credit reporting.
Strengthening rural financial institutions to provide services that complement agriculture and agribusiness is an important step in helping these farming communities across Ghana reduce constraints to economic growth and reduce poverty. By increasing access to more efficient finance, MCC is partnering with Ghanaians on ways to more effectively manage their money now and plan for the future.