The Executive Secretary of the Ghana Association of Savings and Loans Companies, Tweneboah Koduah Boakye is counting on government to come out with a policy that will protect its members trying times.
Speaking in an interview regarding their expectations of the Mid-Year Budget Review, he said the Finance Minister has already been notified by the Association to consider their recommendations.
“We are expecting that the government will come up with a revised policy. In any case there is no policy as far as we are aware for the SDI sector. The regulator is doing what they can do. But we are expecting the government to come with a policy intervention to support the Savings and Loans Companies so that they can continue to serve their clients. This is because the clients are the difficult ones and they are unable to pay their loans. Our balance sheets is made up of sixty to seventy percent loans that we have granted. So if the people are not able to pay, then it will also affect the whole industry”.
Tweneboah Koduah Boakye
In their statement, the Association was of the opinion that although the Bank of Ghana regulates the financial sector, some commendable practices in some countries indicate that some savings and loans companies are better protected from default in loan payment when there is a strong government fiscal policy in place backed by the regulator.
A recent report by the Bank of Ghana has established that even though banks have been resilient to shocks amidst the Covid-19 pandemic, the same cannot be said for Specialized Deposit-Taking Institutions such as Savings and Loans Companies and Microfinance firms.
Meanwhile, the Finance Minister, Ken Ofori-Atta, is scheduled to present the mid-year budget review to parliament on Thursday 23rd July, 2020.
His budget presentation is in conformity with Section 28 of the Public Financial Management Act, 2016 (Act 921).
According to sources, the presentation of the statement on the review of government projections for the 2020 financial year will be backed by a request for supplementary estimates.
As a result of the coronavirus pandemic, the economic implications on government projections for the 2020 financial year have fundamentally been affected.
Ken Ofori Atta is also be expected to provide to Parliament a clear plan on how the government intends to pay back the GHS10 billion it borrowed from the Bank of Ghana (BoG) and the 219 million dollars transferred from the Stabilization Fund to the Contingency Fund to help deal with the impact of the Covid-19 pandemic.
