The Bank of Ghana’s (BoG’s) GH¢15 million capital requirement for finance houses operating in the country is inadequate, the President of Group Ideal, Dr Nii Kotei Dzani, has said.
He said looking at the volume of transactions being carried out by the finance houses, it was important to shore up the capital base of the institutions to ensure that there was enough liquidity to deal with challenges that may arise from the sector.
Addressing investors at a forum by the company in Accra, Dr Dzani stated: “When you look at the GH¢15 million requirement for finance houses and the volume of money they are handling, I think that it doesn’t commensurate and the capital should be higher.”
Ideal Finance, he noted, was, however, building enough capital base to be able to meet any future increase in capital requirement by the BoG.
The company has currently grown its capital base to GH¢57 million and is seeking to grow it further to GH¢100 million<
“We are committed to increasing the capital base of the institution. We at Ideal want to do the right thing, we are not waiting for the BoG to say we should increase the capital before we do it,” he said.
The finance house, which started operations in 2009 as a finance consultancy firm, has gradually grown into what he described as “the most capitalised finance house in the country”, with its current capital base at GH¢57 million.
“By December last year, we were able to increase the capital to GH¢30 million and we have increased it again to GH¢57 million. Our plan is to increase the capital to GH¢100 m by the end of the year,” he announced.
He added that the increase became necessary because the company was recording a lot of non-performing loans and it, therefore, had to pump in more funds from shareholders to build a resilient system.
Customer is key
Dr Dzani explained that at Ideal Finance, the customers were the most valuable asset because of their support for the business over the years.
“We have clients that have been with us for the past eight years, not because we provide the best of products but because of the love you our cherished clients have attached to Ideal Finance over the years,” he stated.
He said the company started off in 2009 as a financial consultancy firm and in 2010, it started doing lending.
“I am proud to say that we are the most capitalised finance house in the country. We have made a lot of achievements because our customers have been very consistent and very loyal to us,” he noted.
The company, he added, from last year, took a decision to cut down cost and to ensure that the company became more profitable.
“We are going to introduce new ways of doing business because we have observed changes in the industry,” he said. — GB