La Community Bank pursues diversification, digitalisation to sustain impressive growth

By Ernest Bako WUBONTO

Achieving a 29 percent growth in revenue year-over-year and a 127 percent growth in profit after tax, La Community Bank seeks to explore diversification of its portfolios and upgrade of digital banking services to sustain the recorded expansion.

The bank, which rebounded from a GH?2 million shortfall in 2021 to issuing GH?0.04 dividend per share in 2024, is optimistic about expanding its bullish growth in its 2025 outlook.

Board Chair of the bank, Seth Nii Sodjah Quao, stressed that leadership remains confident about sustaining and expanding this upward trend.

Touching on the strategic focus areas to drive this growth, he emphasised variation of the bank’s loan portfolios, likely exploring new financial products or services targeted at market women and various traders in the catchment area and expanding into new markets, especially the fast-growing Tse-Addo area.

Among others, the company is also targeting the small and medium-scale enterprises (SME) lending and microfinance innovations.

In a smart move that can be described as killing two birds with one stone, the bank seeks to cut down on operational costs associated with hiring mobile bankers while attracting youthful, technology-savvy clients.

The management intends to intensify digital banking footprints for easy savings collection. This will not only make it convenient for market women and other clients to deposit into their accounts via mobile money (Momo) from any location or anytime, but also attract new customers interested in digital banking with just a snap of a finger.

“We have a strategy aimed at expanding financial products tailored to market women, traders, and SMEs in our operational areas. We will be rolling out microloans and credit solutions to support small businesses, which is also in line with a directive from the regulator.

“Also, we will be exploring new markets, such as the rapidly developing Tse-Addo area, to capture emerging business opportunities,” the Board Chair emphasised.

A Director of the bank, Kennedy Wiafe Effah Esq., on his part, said, “If you look at the loan portfolios, we are doing business, personal and susu loans. So, in the area of the susu loans, we want to add more schemes by partnering with loan groups and associations alike that have demonstrated over the years that they have the credibility to pay back.

We have also realised that in our catchment area, the communities keep expanding, and our market survey showed that penetration into Tse-Addo, for instance, is insignificant, so the plan is to target that area with some of these susu and loans products,” he said.

He also touched on interest in the Bank of Ghana’s (BoG) short-term debt securities -Treasury (T-bills) and other new products coming up on the investment side to grow its market access and revenue status.

“We want to ensure that we do not leave idle funds sitting on our books, so we will diversify loan portfolios and ensure every trader in our catchment area who needs funds to trade is taken care of,” he added.

La Community Bank has already made some investments in the area of digital transformation. The bank currently has a short code *957# that allows customers to access their accounts on mobile phones and link their Momo wallet to their bank account.

“Beyond the short code platform, the grey area we are seeking to explore is to enable our customers to load their accounts from anywhere. We want market women who are in the market to effect the susu payment via electronic means without coming to the bank office,” barrister Effah added.

Risk Factors

The director indicated that the high levels of crime in society in recent times make it increasingly risky to deploy mobile bankers to collect susu -both the personal lives and the customer funds are at risk, hence the need to intensify digital susu payment platforms for safety reasons.

In doing that, the bank is also conscious of enhancing cybersecurity and fraud prevention to build trust in digital transactions.

“Upgrading digital banking platforms will improve our accessibility and convenience for customers. We are introducing mobile banking apps, USSD services, and digital banking agents to reach underserved segments,” he added.

Trading Share  

To raise funds to expand assets under management, the bank aims to trade more shares as a means of revenue generation. To that effect, the management has to raise share prices at GH?1 per share and reduce the minimum shares an individual can purchase from 1500 shares to 100 shares, so that the ordinary community members can also buy shares and join the bank owned by the community.

These strategic initiatives aim to enhance service delivery, improve customer experience, and unlock new revenue streams.

The board chair, in his closing remarks, said, “The future is bright as inflation and exchange rates are dropping drastically. The macroeconomic indicators are showing positive signs, and we believe this will generate more business, and once people can trade and make more money than they can save for the future.”

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