Lower Pra Rural Bank to arrest loan defaulters

Non-payment of school feeding loans and the general refusal of some loan customers to service their huge indebtedness to the Lower Pra Rural Bank Limited at Shama in the Western Region is a grave concern and worry to the board of directors.

Lower Pra is one of the few rural and community banks (RCBs) in the country that are lending credit to support the government's school feeding policy.

Consequently, the bank has decided to vigorously pursue recalcitrant loan defaulters, using all necessary measures to recover the money, including court actions while some of them will be hauled before the traditional authorities for intervention to obtain those overdue loans.

"This year, we shall start arresting people who owe us because we can no longer accept this trend, since that has caused the bank to incur losses in respect of net profit. These loans are recoverable and we hope to recover them soon," Mr Nathaniel Arthur, Chairman of the Board of the Lower Pra Rural Bank, cautioned.

Net Profit

The bank recorded a reduced net profit of GH¢1, 095, 535.27 as of December 31, 2013, as against GH¢2, 068, 202.66 in 2012; a situation which was making it difficult for the bank to extend credit to other customers, Mr Arthur disclosed.

Addressing the 26th annual general meeting of shareholders of the bank at Shama, the chairman indicated that the past due loan ratio was 15 per cent, contrary to the agreed percentage of 10 per cent as enshrined in the bank's corporate plan, with a provision of bad and doubtful debts amounting to GH¢1, 728, 006.97, which had to be made for 2013.

He said the board had recommended a dividend of GH¢0.10 per share for 2013 as mandated by Section 73 of the Companies Code of 1963, Act 179, and that the total amount to be paid to them was GH¢401, 244.