1. Challenges Facing Rural Banks
Presentation by: Atty. Arifa A. Ala 12 November 2013

2. Main Challenges Stiffer competition Changing environment/market
Building talents/expertise
Building capital
Strengthening management
Common management issues

3. Stiffer Competition in the Market
Big banks start to serve rural areas
Economies of scale; wider network
More expertise in marketing/launching products
More innovative
More competitive interest rates
Impact on rural banks
Loss of customers
Lower margins

4. Changing Environment/Market
Customers are more demanding
Technology is rapidly changing; increased IT risk exposure
More regulations

5. Building Talents/Expertise
Difficulty in attracting and retaining pool of talents
Big players offer better compensation packages
Many professionals prefer to work in urban areas
Better career prospects in bigger institutions

6. Building capital Compliance with capital requirements
Expansions require additional capital
Challenges in attracting investors
Especially for financially-challenged banks

7. Strengthening Management
The need for -
More active board and management oversight
Establishment of appropriate risk management system

8. Common Management Issues
In some, management is confined to family members
Limited technical capabilities and experience of people running the banks

9. Management Issues Limited workforce results in- Overlapping Function
Weak segregation of duties
Conflicting functions

10. Thank you