‘Trust us, we’re stronger and better now’ – Savings & Loans companies to Ghanaians

Savings and Loans companies are assuring Ghanaians of a more robust industry after the major clean-up of the industry by the Bank of Ghana.

They want Ghanaians to trust and continue to do business with them as they have learnt from past mistakes and have put in place measures to ensure the safety of customers’ funds.

The Executive Secretary of the Ghana Association of Savings and Loans Companies (GHASALC), Tweneboah Kodua in an interview with Citi News said, but for the banking sector clean-up started some two years ago, some of the collapsed Savings and Loans companies were serving their customers without challenges.

“We want to continue to engage the public to continue to trust the system we have built over the years. Some ofthe companies who went down operated for more than 20 years and had served without any issues but for what happened within the last two years,” he said.

Mr. Tweneboah Kodua was commenting on an AfroBarometer survey that found that Ghanaians consider Savings and Loans companies and Microfinance firms to be unsafe to do business with, unlike universal banks.

According to the survey, 58 percent of Ghanaians feel banks are a very safe place to keep their savings.

A further 25 percent felt banks were somewhat safe with 8 percent and 7 percent respectively saying banks were not safe and not safe at all.

On the Savings and Loans front, 61 percent of Ghanaians feel they are either not safe or not safe at all.

Microfinance companies were given a vote of no confidence with 64 percent saying they are either not safe or not safe at all.

Seventy-two percent of Ghanaians generally felt their mobile money wallets were safe.

But Tweneboah Kodua said Saving and Loans companies will continue to do their best to ensure that monies of their customers are safe.

“Whatever we need to do to make sure that their monies are safe for them to be able to still do business with us, we will do it.”

“We will continue to give assistance and support to the private sector, SMEs and individuals. We are not going to stop doing the good things. We have learnt a lot of lessons over the period and we want to assure the public that the savings and loans fraternity is stronger and better than ever before.”

The Bank of Ghana on August 16, 2019, revoked the licences of twenty-three (23) insolvent savings and loans companies and finance houses.

The central bank in a statement said the revocation became necessary because they were insolvent even after they were given a reasonable period of time to recapitalize.

“It is the Bank of Ghana's assessment that these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors,” the statement added.

BoG in the statement also explained that the actions “were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.” Banking sector clean-up

As part of the Bank of Ghana's cleanup of the financial space, it revoked the licences of nine universal banks, 347 microfinance companies of which 155 had already ceased operations, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions.

Most recently, the Securities and Exchange Commission (SEC) announced the revocation of licenses of 53 Fund Management Companies.

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