Support SMEs -Vice Pee urges loan companies
The Vice-President, Mr Kwesi Bekoe Amissah-Arthur, has asked operators of savings and loans companies to focus their activities on growing small and medium enterprises (SMEs), instead of the established large-scale business entities.
He said the practice of savings and loans institutions channelling financial support to large-scale companies which already had other sources of finance was a disincentive to the development of SMEs.
Such a situation, he said, could create dislocations in the business and financial sectors of the economy.
Speaking at the inauguration of the head office building of Golden Pride Savings and Loans Limited in Obuasi in the Ashanti Region yesterday, the Vice-President said currently about 90 per cent of SMEs faced difficulty in accessing credit because the very financial institutions that were supposed to assist them were not doing so.
Mr Amissah-Arthur stated that the environment the government had created for the financial sector to thrive was to ensure that they offered opportunities to all and not to a particular sector.
Modern business concepts
Golden Pride Savings and Loans Company was established by the Ghana Mine Workers Union in May, 2013.
Mr Amissah-Arthur said the SME sector was a major source of value addition in the economy and must be supported.
He challenged SMEs to adopt modern business concepts to facilitate growth, which was essential to growing businesses.
He also spoke against the attitude of some savings and loans companies to compete with commercial banks, stating, “You must know your niche; the broad masses of the people, especially those who lack banking services.”
Mine Workers Union commended
While congratulating the Ghana Mines Union on the initiative, the Vice-President urged the union to ensure that funds from the savings and loans company were not channelled into the union’s operations but managed in the interest of the shareholders.
The Assistant Director, Banking Supervision Department of the Bank of Ghana, Mr Boyd Donkor, said the decision by the union to diversify its activities to include the establishment of a savings and loans company was a positive move, since it would contribute greatly to financial development of not only the union but Ghana at large.
Be cautious
Much as he welcomed that initiative, he was quick to caution the company against negative practices that could cripple its operations.
To that end, he stressed the need for effective corporate governance, as well as prudent internal control and risk management practices in the company.
Mr Donkor also charged the board and the management to develop effective information and communications technology (ICT) systems in their operations.
The Managing Director of Golden Pride Savings and Loans, Mr Johnson Asamoah, said the company was not oblivious of the high level of competition in the banking sector and indicated that it would continue to develop products that would meet the needs of the people.
He, therefore, urged the public to patronise the company to enable them to enjoy the accompanying benefits.
Currently, there are 23 savings and loans companies in Ghana, with total assets of about GH¢2 billion and deposits of GH¢1.4 billion.
By Kwame Asare Boadu/Daily Graphic/Ghana