The Bank of Ghana (BOG) has stated that it wants competition among savings and loans companies, a situation it believes, would lead to an increase in deposit mobilization and enhance financial intermediation.

Presently, there are about 16 savings and loans companies operating in country including First Allied Bank, Adeyeman Savings and Loans and Procredit.

The Central Bank has initiated several measures in the financial system including the Non Bank Financial Institutions Act 2008, the Borrowers and Lenders Act 2008 and the common electronic platform, Ezwich to re-enforce the financial sector of the country.

Speaking at the launch of Unicredit Ghana Limited, the First Deputy Governor of BoG, Dr. Henry Kofi Wampah, said the establishment of more financial institutions would create efficient and healthy competition that would be driven by appropriate business plans and greater efficiency in the range of products, rates and services.

According to him, the reformation of the financial systems had exposed the sector to best international practices.

Explaining further, he noted that the Central Bank was fully committed to its mandate of assisting the financial sector to grow and expand.

“The financial sector continues to grow from strength to strength and thriving at appreciable levels. “Nevertheless, we advise the financial institutions not to be complacent but to manage their portfolios in an efficient and prudent manner that would serve as catalysts to the development objectives of the country,” he added.

He urged the savings and loans companies to support the growth of indigenous businesses in Ghana, adding, “Many of theses firms are very small with fewer than 10 employees.

They can be described as informal and operating on the margins of the private sector with very little working capital or other resources.”
The financial sector in Ghana had undergone significant restructuring and transformation over the last decade through institutional, financial, operational, regulatory framework and human resource capacity building reforms.

These reforms have been motivated by the need for financial deepening and the desire for a liberalized financial system.

The liberalization of the markets has brought about greater competition to the system and had exposed it to international best practices.

Financial institutions in Ghana have thus been forced to adopt a more open and global attitude in the daily management of their resources.

By Charles Nixon Yeboah

Source: Daily Guide