Ghana’s financial sector went through a tumultuous period following the collapse of 5 banks merged into the Consolidated Bank, Ghana.
The collapse of the five followed the absorption of two earlier banks; UT and Capital Bank by the GCB leading to panic withdrawals.
So far, 23 universal banks have recapitalised on their own or survived through state support to meet the GHc400 million required to stay in business.
The collapse, mergers and general apathy by some citizens to banking has also affected the fortunes of the Savings and Loans entities as folks and businesses say even as low as GHc1000.00 some finance houses couldn’t honour cheques.
Some Savings and Loans officers say while in times past they could meet their 100 person per day quota, since the financial unease in the sector getting 35 clients in a day was challenging as clients fear ‘Susu’ collectors will run with saved funds.
For some clients, they await patiently to recover their sums but vowed not to do business with some Savings and Loans companies again.
According to the Bank of Ghana, only 8 out of the 37 companies operating in the Savings and Loans industry have paid up capital above the minimum amount of GHc15 million although the Savings and Loans sub-sector is one of the fast growing sectors in the banking sector with total assets of GHc6.5 billion. Despite this, a good number of the companies are unable to meet the minimum 10 percent capital adequacy ratio set by the regulator.
For nearly 3 decades the Savings and Loans sector remains integral to the operations of the Micro, Small and Medium Enterprises (MSMEs), the ore reason why after the cleanup of the universal banks, the central bank’s announcement that it has set eyes on insolvent Savings and Loans (S&Ls) companies and finance houses to weed them out is refreshing news.
By Michael Eli Dokosi/goldstreetbusiness.com