The Bank of Ghana has said it has no immediate plans of increasing the minimum capital requirements for savings and loans companies despite a number of them facing distress and difficulties in meeting customers’ obligations.
The Second Deputy Governor of the central bank, Mrs. Elsie Awadzie, speaking at the 9th Annual General Meeting (AGM) of the Ghana Association of Savings and Loans Companies (GHASALC) said the bank will engage stakeholders should it consider a rise in the minimum capital requirement.
“We will take such a decision after consultation with stakeholders and the institutions themselves. As at now, we haven’t increased the capital and we have not put out a proposal because I believe that at a certain point in time if that is the way forward we will do that in consultation with the stakeholders,” she said.
The Central Bank’s recent reforms in the financial sector have seen the recapitalization of universal banks as well as rural and community banks.
Commercial banks were asked to increase their capital to GHS400 million from GHS120 million while rural banks were made to recapitalize to GHS1 million.
With this, some players are positive the savings and loans sector will be affected by the recapitalization.
Executive Secretary of the Savings and Loans Company, Tweneboah Kodua Boakye entreated the BoG to keep the minimum capital requirement at a percentage that will still keep many savings and loans companies active, should it eventually decide to increase the requirement.
Already, reforms by the Bank of Ghana has seen a number of closures in financial institutions ranging from universal banks, microfinance and microcredit institutions.
Governor of the central bank, Dr. Ernest Addison has revealed that the next sector to be cleansed will be the S&Ls with the bank estimating an amount in excess of GHS7 billion needed for that exercise.