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15.04.2020 Letter

A Letter To Teachers' Mutual Fund, Banks, Credit Unions, Micro Finance And Other Financial Institutions That Give Credit To Customers

By Richard Beyemba Yorda
A Letter To Teachers' Mutual Fund,  Banks, Credit Unions, Micro Finance And Other Financial Institutions That Give Credit To Customers
LISTEN APR 15, 2020

What are you waiting for?

Your life lines are the clients/customers currently in a lockdown situation at homes as a result of the presidential directives and imposition Restrictions Act.

Last week, I witnessed a donation by the Ghana Association of Bankers to the Covid 19 fund where GHC 10 million was given out.

The question is, who benefits from that donation, and who are they impressing? Is it the customers or the government?

Alternatively, that huge 10 million Ghana cedis could have been used to fund non-loan deduction of clients and most especially personal loans and perhaps corporate or group loans for a period of three months.

This is because;

1. Almost all of your clients are at home.

2. They cannot work to repay their loans.

3. Those who have regular sources of income be it public workers or private workers are all in a lockdown situation by reason of the current Covid 19 pandemic.

Yes, one agrees that public workers may receive their salary but in Ghana, we know that people have multiple sources of income to sustain them and enable them to service loans. Again, staying home without working comes with a lot of unexpected expenditures.

The kids are at home and so consumption is going up at an unstoppable rate.

Entire families are at home and so utility bills are skyrocketing at an alarming rate.

Our financial institutions and all those that offer loan facilities, ie the Banks, Mutual fund schemes, insurance companies, Micro Finance, Savings and loan Schemes should consider as a matter of urgent national duty, stop loan deduction of their clients for the next three months so that

their clientele can mitigate the unexpected impacts of the Covid 19 on family lives.

One finds the donation by our banks into the Covid 19 fund as counterproductive since in Ghana, usually, such public funds end up being abused by public officials.

Our social system is bad. Such public donations do not get to the desired people. Currently, the food items distribution by the Gender and Social Protection Ministry is not without controversy and abuse by some officials and as usual the politicians also.

The banks have data of clients and so it should be easy for you to plan any such social intervention package for your cherished customers.

This is the time for the above-mentioned institutions to show love and appreciation to their many clients. For we are not in normal times. It should be noted that these customers are the building blocks of their very existence. Thus, stopping loan deductions for the next three months is like re-investing in their own institutions for their future good.

There are other individual clients of the public like the poor tomatoes seller, plantain seller, kenkey seller, boutique operator, cloth seller, etc spare parts dealer, refrigerator seller who are servicing one loan facility or the other but is at home at the moment due to the lockdown.

The continued stay at home of the customers of these financial institutions also means that there is erosion on their incomes. Thus, they will find it extremely difficult to service and sustain the debts with the banks. These clients can come back to work hand in hand with you to reinvigorate our institutions but in the unlikely events that the customers wear away, we cannot revitalise their lives again.

I am by this calling on our Banks, fund management schemes like teachers Mutual Fund, Welfare unions, Teachers Credit Unions, insurances companies, Church Welfare Schemes, microfinance companies, savings and loans companies, rural banks, etc to either scrap or relax loan deductions, defer for the next three months and or give top-up or additional loans for clients with very relaxed conditions but not abandoning the observance of their rules of engagement.

It is in this vein that I congratulate the Republic Bank for taking the lead in this bold decision to defer loan deductions for the next half year.

In the light of the aforementioned issues, the following proposals are made for consideration:

1. Scrap or relax loan deduction for the next three months for existing clients

2. Interest-free on existing loans for the next three months

3. Alternatively, slash by 50% or more on existing loan facilities.

4. The same conditions must apply for new loans

5. Offer top-up or additional loans to existing Customers at an interest-free rate as has been done by one financial house (Dalex Finance)

With the above measures when considered and adopted, they will help the quick return of life to normalcy after the Covid 19 pandemic.

Let us remember:

'we can reinvigorate our financial institutions after Covid 19 is defeated but we cannot revitalise the lives that will wear away during Covid 19'.

#stayhome

#staysafe

Frederick Forson

PR Practitioner & Spokesperson for Coalition of Aggrieved Customers of MenzGold

Accra

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