ABSTRACT
Income generating activities are the sources of revenues for financial institutions. The study evaluated income generating activities of rural and commercial banks. Income generating activity was defined as ‘all operation that produce income or recover cost by providing goods or services to the general public’. Convenience sampling technique was used to sample a rural bank, South Akim Rural Bank, and a commercial bank, GCB, both in the Koforidua municipality as case study.Questionnaires were used to gather primary data on income generating activities of both bank. Other secondary sources of data such as books, journals, articles and reports were also used in the research. Frequencies and descriptive statistics were the major tools used to analyze data collected for the study. The study noted some major income generating activities run by rural and commercial banks to include loans, money transfer, sale of shares, treasury bills etc. The study found that loans are the most profitable income generating activity rural and commercial banks engage in, though other income generating activities generate appreciable income. Further, the study found that commercial banks generate very high income from their income generating activities compare to rural banks mainly due to their large customer base and comparatively wider network of branches. This lays a major distinction between rural and commercial banks. Increase in inflation, deteriorating value of the cedi and the country’s poor economic growth were some factors found to hinder increasing revenue from
