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12.10.2008 Business & Finance

Credit Unions call for legislative instrument to guarantee growth


The Ghana Association of Credit Union Managers (GHACUM) has called for a legislative instrument that would give the union a progressive regulatory framework to guarantee its growth and competitiveness.

Mr Kusi Boachie Yiadom, National President made the call on Friday at the close of the 10th anniversary celebration of the association at Fiapre near Sunyani.

He appealed to the Board of Directors of the union to assist the managers to help members to create wealth to improve their living conditions and to reduce staff turnout to promote experience and a committed workforce.

The week-long celebration under the theme; “Credit Unions, Sustainable Solution for Poverty Reduction,” coincided with the 2008 annual conference of GHACUM.

Mr Yiadom explained that credit unions as microfinance institutions were set up to reduce poverty in line with the Millennium Development Goals.

He said the decision by the Accountant General's Department to decentralize deductions had adversely affected the liquidity of credit unions.

Mr Yiadom appealed to the government to intervene on behalf of the credit union movement to ensure that their deductions went through countrywide and to release the deducted contributions and loan repayments on time to enable the unions to serve members better.

He urged the managers to work harder to attain sustainability to continually provide products and services that could help improve the living standards of members.

“Credit Unions are the oldest microfinance institutions in the country and I believe we must not just follow the competition but rather dictate the pace. This can only be achieved when we meet like this to share ideas and learn new things that will enable us to become innovative in our strategy to achieve member satisfaction and sustainability,” he added.

Nana Kwadwo Kwakye, Deputy Brong-Ahafo Regional Ministers said the government had put in place many interventions to assist poor farmers, traders and cottage industries among others to increase their production capacities and to earn more income.

He said small scale farmers, food traders, artisans and owners of cottage industries constituted a very important segment of the workforce in the country.

He however expressed regret that owing to their inability to provide collateral security to the traditional banks, they found it difficult to obtain the needed financial assistance to expand their economic ventures.

“Credit unions should be viewed as worthy partners of government in that direction and the credit union movement and government ought to work together to improve the lives of our people,” Nana Kwakye said.

He emphasized that credit unions were being confronted with a number of competitors including rural banks, microfinance institutions, loan and savings companies, insurance companies and commercial banks.

To exist as viable and sound non-banking financial institutions, the leadership must be able to improve their financial management skills, introduce new products and services and to develop effective governance system that would appreciate long-term sustainability and efficiency in their operations, Nana Kwakye said.

He disclosed that during the period under review, the government had supported the Credit Union Association through the Rural Finance Services Project with 10 fax machines, 12 personal computers and accessories, one laptop, 14 steel cabinets, 20 motor cycles and two vehicles.

Nana Kwakye expressed optimism that credit unions could play an important role in support of the government's job and wealth creation programmes for the urban and rural poor.

Mr Emmanuel Oduro Darko, General Manager of Credit Union Association, reiterated the need for credit unions to be efficient and effective in managing its profitability, assets quality and capital adequacy levels for its future viability and sustainability.

He commended GHACUM for its hard work, dedication and contributions towards the development of humanity.