Leadership of the Ghana Co-operative Credit Unions Association (CUA) wants President Akufo-Addo to intervene and help recoup their lock-up funds as a result of the banking sector cleanup.
CUA says its members have well over GH¢180 million locked up in 31 financial institutions whose activities and operations were affected by the recent financial sector cleanup exercise by the Bank of Ghana.
According to them, 21 of such institutions which are now defunct, have over GH¢130 million stuck with them, with 10 other existing financial institutions holding over GH¢50 million in locked-up funds belonging to members of the CUA.
Addressing President Akufo-Addo at the Jubilee House Monday, President and Chairman of the CUA Board, Dr. Bernard Bingab, said whiles CUA recognised the intervention of government as a result of the financial sector clean-up, members of the association were struggling because a significant part of their investment were locked-up.
Also, he said CUA has sought for support from the Ghana Enterprises Agency (GEA) in the government’s COVID-19 alleviation fund, but has not received any positive feedback till date.
“For this reason, the board of CUA wants to appeal to His Excellency the President to support the credit unions through CUA to help address the challenges they face in such trying moments,” Dr. Bernard Bingab said.
Dr. Bingab also raised concerns about the seeming delay in the operationalisation of the Credit Unions Legislative Instrument LI2225 since its passage in 2015.
According to him, “Several efforts have been made by CUA in engaging the relevant state institutions on operationalising the law.”
“Except to say that quite recently, the Honourable Minister for Finance has in principle accepted that CUs need to be regulated because, regulation is the function of the State. We, therefore, seek the kind intervention of the high office of the President of the Republic of Ghana towards regulating CUs in Ghana as is done in sister countries, like The Gambia and Kenya,” Dr. Bingab stated.
“We also notice that there exists a couple of laws that govern regulation of credit unions, the Co-operative Degree, Bank of Ghana Act and the non-Banking Financial Act. These laws are multi-sectoral and therefore needs to be harmonized to make regulation smoother,” he added.
The Credit Unions Legislative Instrument, LI 2225 (2015) is to allow the credit union movement to continue to play the role it has always played in the economy, but from a position of greater strength, safety and soundness.
The legislation, among others, according to the CUA Board Chairman, “will encourage greater prudence in the management of loans granted by the credit unions, ensure adequate capital, provide greater guidelines for investment activities of credit unions, and ensure more effective corporate governance system.”
President Akufo-Addo, reacting to the appeal, assured the leadership of CUA and its members that their funds would be released to them as soon as possible.