Dr. Emmanuel Owusu (left) with Isaac Kweku Arthur at the forum
Ghana Association of Savings and Loans Companies (GHASALC) has expressed concern about attempts to lump their activities with that of microfinance service providers in the financial service sector.
They said the recent mishaps suffered by some microfinance companies had created a negative impression that savings and loans companies were involved in the whole unethical practices.
GHASALC therefore sensitised the public on their activities whilst drawing the distinction between the roles of the entities.
At a GHASALC forum for journalists in Accra yesterday, Dr. Emmanuel Owusu, president of the association said “as part of our deliberations, the board, forum of CEOs and the secretariat have identified a number of constraints affecting the image and operations of savings and loans companies in Ghana which have prompted detailed attention to address them.”
Giving an overview of Ghana’s financial sector, Dr. Owusu said that the classification of savings and loans as microfinance firms sometimes create confusion among the clientele and that did not promote the sector.
He said GHASALC was preparing a proposal to appeal to the regulator Bank of Ghana (BoG) to reconsider a change of name for the savings and loans companies under the 2011 notice (BG/GOV/SEC?2011/04) for the microfinance sector since the lack of clarity was having what he called ‘unintended effect’ on their members.
“The savings and loans sector is making significant impact on the unbanked financial sector. It is business we must do but how we do it and how we get the public to have confidence in us is what we are continuously working at.”
Isaac Kweku Arthur, an advocacy team member of GHASALC, said the tier system as defined by the regulator made the services savings and loans companies provide very distinct.
He said measuring activities of micro finance companies on the same scale as savings and loans outfits was an anomaly that the regulator needed to assess once more.
“We have decided to embark on stakeholder campaign to draw the public’s attention to the fact that we play a distinct role from the micro-finance companies.
“We want clients to be clear in their minds where they would like to save.”
Mr. Arthur said “the name microfinance has become synonymous with the system because microfinance itself is a product being offered by the savings and loans companies.
“We have services that cannot be performed by microfinance companies. We don’t suffer limitations in what we can offer but in the course of doing business, we tend to have negative perceptions,” he said.
Eunice Brako Marfo, Executive Secretary of GHASALC said under the current arrangement, micro-finance companies could proceed to operate with a provisional lincense but under savings and loans the license has to be approved by the regulator in its entirety before operation could commence.
By William Yaw Owusu