Credit Unions have been advised to improve operations, employ innovative techniques and reposition strategically to remain relevant and make significant impact towards Ghana’s economic development.
The Director-General of Securities and Exchange Commission (SEC), Daniel Ogbarmey Tetteh, speaking at the recent Biennial Conference organized for the Ghana Co-operative Credit Unions Association (CUA) intimated that a developing country like Ghana, needs cooperative credit unions and non-bank financial service providers to grow the economy as they provide the much-needed capital in both short and long term to drive economic activities especially in the informal sector.
The importance of the financial service sector to the economy cannot be undermined, Rev. Tetteh said adding that there must be deliberate and intentional interventions to ensure it remains healthy and relevant, cautioning the union not to compromise on the need to uphold best practices when it comes to corporate governance, and to remain compliant as it is apropos to the success of a financial institution.
Rev. Tetteh went on to assure the management of CUA that its outfit will make sure that the 50 percent of locked up funds with SEC regulated firms will be disbursed as soon as possible to bring relief to the cooperatives whilst the other 50 percent is paid in bonds and investments.
Sharing his thoughts, the Minister for Employment and Labour Relations, Hon. Ignatius Baffour Awuah opined that the continued relevance of cooperatives in national development is very crucial especially in this pandemic era compelling development partners and industry players to review their preparedness for unforeseen challenges.
Recounting the negative impact of the coronavirus pandemic the Minister whined that the global crises has affected the livelihoods of most individuals and businesses adversely, imposing uncertainty about the future and requiring the adaptation of new techniques of doing business.
Furthermore, Mr. Awuah encouraged credit unions and other non-bank financial institutions to promote financial inclusion in the country by addressing the financing gap in the informal economy and micro or small-scale enterprises. Also, there is a great need for capital injection into the informal sector which commands about 90 percent of economically active persons.
“This[financial inclusion] gap created is being filled by cooperative credit unions and other non-bank financial service providers but the task now is how to deploy new and more innovative ways of addressing the problem,” he intimated emphasizing the need for cooperatives to adopt new technologies, develop new products and innovate to meet specific needs of the market and affirm sustainability to remain relevant.
Emmanuel Coffie, the General Manager of CUA, also revealed that because members of the unions have been impacted heavily by the coronavirus pandemic and the financial sector clean-up, initially credit mobilization got affected, however, businesses are picking up and credit unions are bouncing back strongly and are on course to meeting targets of full operation.
“We are able to exist as credit unions because we have been able to create funds for ourselves called Central Finance Facility (CFF), so when members were having liquidity challenges and difficulties, we assisted them with that initiative so going forward we will put more funds into that reservoir to mitigate unforeseen challenges in the future,” he disclosed.
