Mrs Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana (BoG), has charged the Savings and Loans (S&L) sector to take steps to leverage emerging technologies to modernise its business models to meet the fast-changing needs of their customers.
According to the Second Deputy Governor of the Bank of Ghana, it is important to help the sector to remain relevant to the segment of the economy it served.
Speaking at the 12th annual general meeting of GHASALC, Mrs Awadzi noted 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 Micro, Small and Medium Enterprises (MSME) sector with their innovative digital financial services.”
Mrs Elsie Addo Awadzi
Mrs Awadzi noted that all around the world, technology was fast disrupting traditional business models for delivering finance.
“Undoubtedly, the S&L industry is at a critical juncture and some strategic rethinking is required by key stakeholders to reposition the industry to unleash its full potential to serve low-medium income households and the micro, small, and medium-sized business sector which is the main driver of socio-economic growth for our economy.”
Mrs Elsie Addo Awadzi
Mrs Awadzi called on the S&L to put strong governance and risk management systems in place to help mitigate these risks as financial institutions exploit the benefits of digitalisation. To this end, she urged S&L companies to augment their capital base in order to digitise and deploy more sophisticated systems to help mitigate attendant cyber risks.
Mrs Awadzi commended the S&L sector for the role it was playing in the development of the country.
“The role of the S&L industry in our economy has been significant, providing critical financial services to the Micro, Small and Medium-Enterprises, the informal sector, and households.”
Mrs Elsie Addo Awadzi
Total Assets of the Specialised Deposit-taking Institutions
The Second Deputy Governor disclosed that at the end of the first quarter of 2022, total assets of the specialised deposit-taking institutions’ sector exceeded GH¢16.0 billion. Out of which the savings and loans sub-sector contributed 35.1 per cent.
Mrs Awadzi averred that S&L companies disbursed a total of GHc3.4 billion in net loans to private enterprises and businesses in the first quarter of 2022 alone.
The Chairman of GHASALC, Mr Kwame Owusu-Boateng, in his remarks, stated that the association continued to play its intermediary role to ensure that the sector as a whole, remains vibrant to discharge its mandate with excellence. He urged members of GHASALC to develop alternative channels to enable their clients access their services.
“Through innovation, we stand a better chance of retaining and improving our client base by giving them ability to do more with little effort and less cost.”
Mr Kwame Owusu-Boateng
The Executive Secretary of GHASALC, Mr Tweneboah Kodua Boakye, moreover, stated that the effect of the COVID-19 pandemic compelled the members of S&L to be innovative and invest in digital platforms to retain and increase its customer base.
“This drive led to an appreciable increase in clients (i.e 21.67 per cent increase) from about six million in December 2019 to 7.3 million as of December 2021. The sector as of December 2021 also recorded a sizeable increment in total assets, deposits and loans at 25.48 per cent, 33.44 per cent and 64.08 per cent respectively as compared to pre-COVID-19 (December 2019) and pre-sector clean-up exercise.”
Mr Tweneboah Kodua Boakye
Mr Boakye noted that the association was collaborating with some Fintech companies to develop digital solutions to enhance the operations of S&L companies.
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