Predicting the Performance of Rural Banks in Ghana Using Machine Learning Approach

Table 1

Various classes used by ARB to classify rural banks’ financial status (source: Association of Rural Banks Quarter Report, 2017).

Rating range	Rating analysis	Interpretation of rating analysis	DMUs
1.0–1.50	Strong	Sound in all indicators, no supervisory response required	99
1.50–2.50	Satisfactory	Fundamentally sound with modest correctable weaknesses; supervisory responses limited	330
2.50–3.50	Fair (watch category)	Combination of weaknesses which if not addressed will become severe. Watch category	164
3.50–4.50	Marginal (signs of risk of failure)	Immoderate weaknesses: unless properly addressed, could impair future viability. Needs close supervision.	64
4.50–5.0	Unsatisfactory (high degree of failure evident)	High risk of failure in the near term. Needs constant supervision.	0