The Ghana Association of Savings and Loans Companies (GHASLAC) wants government to develop a specific policy that will guide operations in the sector as is the case with rural banks and microfinance companies.
Its Executive Secretary, Mr Tweneboah Kodua Boakye, said although most of the institutions in the financial sector were guided by the Banks and Specialised Deposit- Taking Institutions Act 2016 (Act 390), there were other sector-specific policies for microfinance institutions such as the Ghana Microfinance Policy, hence a similar thing could be done for GHASLAC members.
In an interview after the 8th annual general meeting (AGM) of the association in Accra, Mr Kodua Boakye made a strong case for the Bank of Ghana and the Ministry of Finance to come up with the policy to guide decisions that affected the sector.
“We use the SDI Act as a policy direction, which is a framework everybody can operate legally under. There is the Ghana Micro Finance
He said it was time for stakeholders to deliberate on this sector specific policy and its framework and added that the association was ready to help in the development of the policy.
“It is expected that the policy should come from the Ministry of Finance through the regulator, which is the Bank of Ghana, but our association is ready to help in this direction and to also champion the drafting of the policy for the whole space so that we will know as a country where we want savings and loans companies to reach,” he added.
He said the environment in which the savings and loans companies operate were not favourable, hence the rush by some of the institutions to want to scale up to commercial banks.
He, however, explained that if structures were put in place and the environment made more conducive, a lot of the companies would stay in the sector.
“If we will make the conditions of operating in the savings and loans industry favourable and very good, the companies would love to stay there and operate and do very well. If we build the right systems and get the right structures in place to create a stable business environment, I am sure our people will stay and be happy to operate in the sector,” he added.
BoG up to the task
The Governor of BoG, Dr Ernest Addison, in a speech read of his behalf by his advisor, Mrs Grace Akrofi, said given the important role that specialised deposit institutions played in financial intermediation, the Bank of Ghana has committed itself to carving its supervisory functions consistent with international best practices and in line with the Basel Core Principles for effective supervision to enhance the legal and regulatory framework.
In addition, the Bank of Ghana, she said issued Corporate Governance Directives for banks and Specialised Deposit institutions regulated under the Banks & Specialised Deposit-Taking Institutions Act, 2016 (Act 930) in March 2018.
“I am confident that this directive will contribute significantly towards strengthening governance systems in the banking system,” she said.
He added that in recognition of the centrality of risk management and compliance systems in any corporate governance framework, the Bank of Ghana was also reviewing risk management guidelines for adoption by the industry.
Other guidelines and directives that have also been finalised and ready to be issued for the industry are the guidelines on mergers, acquisitions, ownership and control, guidelines for Financial Holdings Companies and Outsourcing guidelines, among others. — GB