Specialised Finance House Bill before Cabinet
Cabinet is studying the Bank and Specialised Deposits-Taking Institutions Bill, which will address the gaps in the Banking Act, for approval.
The Bill, when passed into law, will address issues of consolidated supervision, reinforcement on exposures of connected nature, prompt corrective actions and detailed resolution framework.
The Assistant Director, Banking Supervision of the Bank of Ghana (BoG), Mr John Warisa, said the introduction of the new law had become necessary because of the rapid evolvement of the banking industry in terms of product development, reach and scope, which demands a rethink of the legal and regulatory regime.
“A number of guidelines and directives relating to corporate governance, outsourcing, mergers and acquisition, risk management and establishment of representative offices are at advance stages of discussion awaiting final approval and issuance,” he said at the launch of SIC LIFE Savings and Loans Company in Accra.
Mr Waris said explained that the bill, when it becomes law, would go a long way to deepen the risk-based approach supervision.
He urged deposit taking institutions to continuously assess their risk profile, especially when they are expanding and venturing into new activities in order to put in place the appropriate measures to mitigate the associated risks.
SIC Life Savings Loans Company Ltd
SIC Life Savings Loans Company Ltd is a wholly owned subsidiary of SIC Life Company Limited that was incorporated in July 2010 to operate as a finance house. After a few years of operations, it has converted into a savings and loans company.
Some of the company’s products include savings and current accounts, fixed term investments, personal and business loans, micro enterprises (Sika Plan) loans, consumer asset and equipment finance, money transfer and mobile money services.
The Managing Director of the company, Mr Richard Appietu, said from July 2010 to now, deposits had grown from GH¢1.3 million to GH¢95 million, loans and advances appreciated from GH¢8 million to GH¢54.4 million, total assets increased from GH¢7 million to GH¢14.3 million, while profit before tax increased from GH¢100, 000 to GH¢2.5 million.
“SIC Life Savings and Loans is not only here for loans and investments. Micro, small and medium enterprises need advisory services, training and guidance in their businesses to help them grow and we will provide that. Our business culture is one that is truly customer focused and high performing,” he said.
As at November 2015, there were 29 savings and loans companies, with total assets of GH¢3.5 billion. This represents a growth of 25 per cent over its total assets in November 2014, which was GH¢2.8 billion.
Financial inclusion in Ghana
A Deputy Minister of Finance, Mrs Mona Quartey, said: “Evidence across the globe suggests that a well-diversified, vibrant and deeper financial services sector plays a critical role in the growth of an economy by promoting inclusive growth, shared and sustainable development and the overall prosperity of a nation.”
Mrs Quartey said private investment was a critical source of long-term capital for spurring sustained economic growth and diversification while promoting innovation by supporting the MSMEs.
“In order for the financial sector to fully satisfy the credit demands of the productive sector, banks and savings and loans companies should not be overly conservative in terms of their risk appetite for MSMEs,” she said.
She urged financial institutions to seek a better understanding of the risk associated with lending to these enterprises and other specilised growth sectors such as agriculture, tourism, manufacturing and mining by deliberately developing relevant human resource skills in these sectors.