The Ghana Association of Savings and Loans Companies (GHASALC) has held its 12th Annual General Meeting (AGM) in Accra under the theme “Driving Financial Inclusion through Digitilization: Role of Savings and Loans Companies.”
Mr. Kwame Owusu-Boateng, Board Chairman of GHASALC, stated that the association at its AGM last year met to deliberate on the theme “Looking beyond Covid-19. The role of the S&L Sector in the National Development Agenda”.
At the meeting, he said members discussed how the S&L sub-sector would be able to deal with the aftershock of Covid-19 as well as take advantage of any opportunities to be better positioned to meet the needs of clients.
“It is refreshing to note that the sector is gradually embracing and investing in innovative structures to improve its operations,” he added.
He said the association continues to play its intermediary role to ensure that the sector as a whole remained very vibrant and discharged its mandate with excellence.
He disclosed that “As of December 31, 2021, the association was made up of all the 24 savings and loans companies operating in the country, and collectively served in excess of 7.32 million customers with a total asset of about GHc5.6 billion”.
He added that the sector also employed about 7,271 staff operating from its 550 business outlets across the length and breadth of the country.
The sector serves MSMEs, formal and informal employees, civil servants, small holder farmers, etc. As we contribute to the Gross Domestic Product (GDP) of the country as well as job creation and financial inclusion, he said.
Mr.Owusu-Boateng indicated that the sector recognizes the positive impact of digitization on businesses in the financial space from its Covid-19 survey conducted in 2021 hence the theme for this year’s AGM.
He added that the survey results brought to the fore that institutions that had invested in digital platforms recorded very little or no difficulty in serving their clients, and such companies were able to deal with problems of loan disbursements and repayments which were part of the operational activities mostly affected during the pandemic.
Mrs. Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana said, digitization is changing the way financial institutions store and analyze data, relying on cloud-based infrastructure which offers among others, cost reduction, processing speed, integrated security, improved scalability, flexibility, and improved risk management.
She said: “The AGM is happening at a crucial era in the global economy as well as in our Ghanaian economy, with the fallout from covid-19 pandemic and the recent Russian-Ukraine war”.
The role of the S&L industry in our economy has been significant, providing critical financial services to the MSME sector, the informal sector, and households.
“At the end of the first quarter 2022, total assets of the specialized deposit-taking institutions sector exceeded GH¢160 billion, of which the S&L sub-sector contributed 35.1%.
Savings and loans companies disbursed a total of GH¢3.4 billion in net loans to provide enterprises and businesses in the first quarter of 2022 alone, she added.
She reiterated that, all around the world, technology is fast disrupting traditional business models for delivering finance all round the world and is redefining services as we knew them with immense benefits and some risk too.
The second deputy governor added that financial institutions that have not already designed, adopted, and implemented a digital transformation strategy are already behind the curve.
The S&L sector risks becoming a dinosaur as more banks reach the informal sector and MSME sector with their innovative digital financial services.
She emphasized that, “Digitalization comes with its own complexities and risks, including cyber security risks, third and fourth party /outsourcing risk, data privacy breaches, technology failure risk, increased AML/CFT risks, and consumer protection risk among others.
“Needless to say, a lot is required by way of strong governance and risk management systems to help mitigate these risks as financial institutions exploit the benefits of digitization, S&Ls will therefore need to augment their capital base in order to digitize and deploy more sophisticated systems to help mitigate attendant risks,” she said.
Mrs. Awadzi climaxed the AGM with the launch of the Association’s Code of Conduct and Ethics, saying, the importance of the code of Ethics and Professional Conduct for the sub-sector, “we all saw how widespread incidence of mismanagement, fraud, non-compliance with rules and high standards of ethics contributed to the collapse of 420 financial institutions regulated by the Bank of the potential to improve confidence and trust in the savings and loans sector and help to boost its fortunes”.
The GHASALC AGM saw the re-election of Mr. Kwame Owusu-Boateng, CEO, Opportunity International S&L as the Chairman of the Association; Mr. Oliver Bailly-Bechet MD, Advans Ghana S&L as Vice Chairman, with Mrs. Lydia Daddy, MD, Services Integrity S&L; Mr. Arnold Parker CEO, Letshego Ghana S&L; Mr. Yusif Abubakari, MD, Jins S&L and Mr. Mohammed Aourongjeb, CEO of ASA S&L serving as board members respectively.
GHASALC, the umbrella body for all savings and loans (S&L) companies which are deposit-taking non-bank financial institutions, is regulated by the Bank of Ghana (BoG) under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), which was established in 2008.
GHASALC serves as a mouthpiece of all savings and loans companies in Ghana.
The savings and loans companies offer financial services to primarily the economically active under-banked and unbanked within the informal sector, by offering tailored products and services that meet the needs of their target population.
By Edith Amegatcher
