Consumer Credit Limited Collapses

Consumer Credit Limited, a company set up in 1985 to help workers buy goods on credit, risks collapsing if its shareholders, the Social Security and National Insurance Trust (SSNIT) and SG-SSB Bank do not put in place a plan to salvage it.

Presently, the office of the company in Accra has been closed down, while some of its property, such as vehicles, fridges and air conditioners, have been seized by Somotex Ghana Limited, dealers in electrical appliances, as a way of enforcing a court order.

The company is indebted to the tune of ¢4.1 billion as of December 2004.

Out of the amount, Somotex is owed ¢600 million, including court charges. Other trade creditors of the company are Kwatsons Limited, Latex Foam Rubber Products and General Line.

The shareholding structure of the company currently stands at SG-SSB, 18 per cent, while SSNIT is the biggest shareholder with 82 per cent.

The imminent collapse comes at a time when the Government is putting in place modalities to encourage consumer credit operations in the country to help workers to acquire their needs, including houses, on credit.

The minister for finance and economic planning, Mr Kwadwo Baah-Wiredu, said any plans to salvage the company must be implemented as part of a broader package to make the system of extending credit to consumers more viable.

He attributed the problem of consumer credit schemes to the lack of transparency on the part of customers of the companies and some of the workers. According to him, any effort to extend credit to the people risked falling apart if a national identification scheme was not put in place to make room for easy identification of all people living in Ghana.