BoG Cleanup To Hit Savings And Loans
The Executive Secretary of the Ghana Association of Savings and Loans companies, Dr Tweneboah Kodua Boakye is advising the Bank of Ghana (BoG) to adopt a better approach in dealing with the challenges Savings and Loans sector. This follows some hints from the regulator that there is an imminent clean up in the savings and loans sector.
Speaking on the Business Edition of PM EXPRESS he believes more consultation with the stakeholders is right and the better way to go as compared to how the regulator dealt with the commercial banks.
Earlier, the Central Bank Governor Dr Ernest Addison said, a few savings and loans firms have shown signs of insolvency and will have to be liquidated just as has happened with the banks.
Addressing a press conference after the Monetary Policy Committee’s meeting in Accra in September 2018, Dr Addison said: “We are discussing with the Ministry of Finance the measures which need to be taken to stabilise that segment of the market”.
He went on to say that the measures for stabilising the savings and loans segment of the financial market “are no different from the measures that have been taken with regard to the banks”, adding that: “If these savings and loans companies are insolvent, they will have to be liquidated; that is the solution for insolvent financial institutions”.
The deposits of these institutions, he said, are not insured; for which reason there has to be a cost associated to dealing with them, with implications on the budget.
“This is where we are in the discussions. What sort of intervention to make in that segment of the market. Who will pay for the cost of resolution in that sector? Once we reach a conclusion, the necessary thing will be done,” he said.
According to the central bank, there are currently 37 licenced savings and loans companies operating across the country.