CAFAC launches Ghana Ahiafo Bank (GAB)

The Corruption and Fraud Audit Consortium of Ghana (CAFAC) does not just have an anti-corruption agenda but is constantly brainstorming about any issues that have even the slightest collateral benefit to the downtrodden and voiceless in our beloved Ghana. The principals at CAFAC are in total agreement with President Obama that income inequality remains the “central and defining challenge of our time.”

Recently, an idea that has come to the fore is a not-for-profit bank which will be devoted entirely to poor people. This bank will be opened in the 4th quarter of 2014 and will be called the Ghana Ahiafo Bank (GAB). This is a bank that is uniquely different from the traditional retail /commercial or investment banks. It may resemble microfinance institutions to slight extent but it is drastically different in many respects. This bank is the brainchild of Hector Boham, President and Co-Founder of CAFAC Ghana Limited.

Hector studied extensively the work of Professor SUNITRA and the Grameen Bank whist undertaking a Master of Public Policy Program at Princeton University in 2000. Hector has also studied the work of the hedge fund manager Paul Tudor Jones and the Robin Hood Foundation of New York and has come to the conclusion that a marriage between the two philosophies will be an excellent way to fight poverty and ensure that the economy works for the rich and poor alike. This is the genesis of the idea behind “Ghana Ahiafo Bank.”

The Grameen Bank was founded by Professor Muhammad Yunus, Head of the Rural Economics Program at the University of Chittagong, who launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. Some of its objectives include 1) extend banking facilities to poor men and women 2) eliminate the exploitation of the poor by money lenders

3) create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh

4) bring the disadvantaged, mostly the women from the poorest households, within the fold of an organizational format which they can understand and manage by themselves; and 5) reverse the age-old vicious circle of "low income, low saving & low investment", into virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income".

The Robin Hood Foundation, on the other hand, has focused on finding, funding and creating programs and schools that generate meaningful results for families in New York's poorest neighborhoods. Over its 25 history, Robin Hood has distributed more than $1.2 billion to hundreds of New York City based soup kitchens, homeless shelters, schools, job training programs and other vital services that give New York's neediest citizen's the tools they need to build better lives for themselves and their families. According to Fortune Magazine, "Robin Hood was a pioneer in what is now called venture philanthropy, or charity that embraces free-market forces. An early practitioner of using metrics to measure the effectiveness of grants, it is a place where strategies to alleviate urban poverty are hotly debated, ineffectual plans are coldly discarded, and its staff hatches radical new ideas.”

The Ghana Food Bank believes in all the objectives of the Grameen Bank but will provide a little slant – it will not operate on the principles of microfinance – because its distributions will not be loans but will be grants. In that respect GFB moves closer to the Robin Hood model.

The Ghana Ahiafo Bank and a Traditional Bank: Similarities and Differences
A traditional bank is a financial institution authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.

The Ghana Ahiafo Bank will accept deposits from donors but it will not be expected to pay any interest on the deposits; neither will it be expected to pay it back to the owners on demand ; they will not be demand deposits but simply gifts. GAB will not issue checks or clear checks. It will not give loans but it will give grants with no expectation of payback. In certain instances GAB will act as an intermediary between its customers and other counterparts in a transaction. A traditional Bank will grant priority to its account holders. The Ghana Ahiafo Bank will grant priority to every Ghanaian as long as they can meet the stipulated guidelines to qualify to receive services. Finally whereas traditional banks aim is to earn profit and return on investment for their shareholders, GAB will operate as a nonprofit organization whose aim is to provide goods and services to accomplish its mission and vision.

How will Ghana Ahiafo Bank Operate?
With normal banks one cannot take money out if one does not put money in, but with the Ghana Ahiafo Bank most of the recipients of the grants will not be required to make any contributions into the bank. GAB will collect donations of money from the general public and then distribute them to the poor in the form of grants which they will not be expected to pay back. The donors will get a tax write-off and so it will be a win-win situation – donors, GAB and its recipients – everybody wins - no losers.

These grants will not be simple handouts but will be targeted – meaning, the GAB grants will concentrate on areas that have been proven to be the strongest drivers on the fastest path from poverty to middle class status – early childhood, education, jobs and economic security, and survival. GAB believes that for some of society the reality is that they will need help even to meet the very basics of life such as food, health and shelter – for such people GAB will establish Food Banks, Shelters and provide access to free health care.

In line with the Robin Hood Foundation philosophy of embracing market forces GAB will:

• Invest its donations in revenue generating vehicles both in the Ghana Stock Exchange and also in business ventures

• Protect and leverage its investments by using sound business principles to help programs become more effective.

• Use metrics and qualitative data to evaluate programs and measure results to compare the relative poverty-fighting success of similar programs.

• Grants will be given after strong and strict assessments and there will be ongoing evaluations to ensure that projects and programs being supported are moving on tract and not faltering.

Sources of Funds for the Ghana Ahiafo Bank
1) Hector Boham, the founder of Ghana Ahiafo Bank will lead by example and will therefore donate $10,000 of his own personal funds as seed money for GAB to commence operations.

2) GAB will make sure that every member of the Board of Trustees contributes a certain percentage of their income to the annual operating fund of the bank

3) Every employee of the Ghana Ahiafo Bank, especially the top executives will be expected to make an annual or monthly contributions from their paychecks.

4) GAB will operate on the “Robin Hood” principle of taking money from the rich and giving them to the poor. Consequently every rich person in Ghana will be encouraged to make donations to GFB

5) On the basis of the concept of “Corporate Social Responsibility” we will expect all corporations in Ghana to contribute to GAB

6) Politicians, especially those in power who are in power and benefit from political patronage must contribute to GAB

7) Professionals such as doctors, architects, pharmacists, lawyers, judges, professors, accountants will be solicited

8) Individuals are the largest source of charitable donations for nonprofit organizations and we would expect no less from ordinary Ghanaians from all walks of life.

9) Many nonprofit institutions benefit from all levels of government. State, and local government grants fund many programs provided by nonprofits, and GAB will expect to be considered for such funding.

10) Foundations come in various sizes and types but their grants can be important and substantial. Most of these foundations shall be based in Ghana, but there are a few foundations based in the USA who will also donate funding to worthy causes in developing countries.

11) GAB will source funds from International Organizations that take interest in poverty alleviation initiatives in Africa. Organizations such as The World Bank, Unicef, United nations

12) The Grameen Bank and the Robin Hood foundation will be courted for funding – being the organizationa that gave the inspiration to the founder.

13) Ultimately GAB expects to build up a large endowment fund to invest and generate interest that will be used to support the bank's operating costs.

Conclusion
The inauguration of GPB is slated for the 4th Quarter of 2014 but arrangements are already underway and you must watch this space for updates and progress reports. See you in the winner's circle.

Hector Boham can be reached at [email protected] with any comments or suggestions.

In line with its belief that education is one of the surest ways to fight poverty, CAFAC prepares professionals to obtain their certifications as CERTIFIED FRAUD EXAMINERS (CFE), CERTIFIED INTERNAL AUDITOR (CIA), CERTIFIED INFORMATION SYSTEMS AUDITING (CISA), and ACCREDITED PETROLEUM ACCOUNTANT (APA)

If you are interested sign up at the website www.cafacghana.com or send an email to Hector