The African Development Bank (AfDB) has approved a loan of 4.64 million US dollars to support rural financial services in Ghana.

The project will provide institutional support to rural and community banks to raise their ability to handle the increasing demands of modern banking.

The loan is part of a 22 million-dollar project also being financed by the World Bank and the International Fund for Agricultural Development.

It will be repaid in 50 years with a 10-year grace period.

This brings to 701.3 million dollars loans approved for Ghana by the AfDB and the World Bank for 55 projects. Of the total, 549.59 million dollars have been disbursed.

A statement issued by the Abidjan-based African bank in Accra said the objective of the loan is to "accelerate rural development and reduce poverty in Ghana."

"The project particularly seeks to strengthen the rural financing institutions in order to enhance their efficiency to intermediate in the rural areas.

"It is also to strengthen the capacity of rural and community banks to improve their effectiveness and quality of service."