International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Impact of Share Pricing On Financial Performance of Rural and Community Banks in Ghana
Ernest Ofori Asamoah (PhD), Robert Donaldy, Degraft Owusu Manu (PhD)

Rural and Community Banks concept through the ingenuity of the Central Bank has come to stay in Ghana. Their involvement and contribution to the financial sector and the economy in general are enormous. Most importantly, providing jobs to the youth, financial assistance to farmers, artisans and petty traders in the rural areas who hitherto were denied by the big commercial, investment and development banks in the cities and developing savings and commerce cultures in the rural dwellers cannot be underestimated. The main challenge they face is inadequate share capital. Subscription to the Rural and Community Banks shares is low and the need to promote interest in existing and prospective shareholders will enable them to take advantage of business opportunities and provide improve financial services. The aim of this research therefore was to examine the impact of share price on the financial performance of Rural and Community Banks. Survey questionnaires were administered on directors and senior managers of twenty five (25) Rural and Community Banks with a response rate of 86 percent. The data were tested using Regression Analysis and Statistical Package for Social Sciences (SPSS). Variables comprising Profitability, Liquidity and Economic Value Added were considered to have relationship with RCBs share prices and hence contribute to their financial performance. The study also contributes to knowledge as it addresses the gap in existing literature by focusing on Rural and Community Banks (RCBs) shares unlike those financial institutions whose shares are traded on the Stock Market.

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