The Bank of Ghana has reiterated that it will ensure that all licenced institutions operate within the rules and laws governing their operations, Mr. Raymond Amanfu, Head of Licencing Division, Bank of Ghana has stated.

According to him, the Central Bank will provide the needed support and guidance to all financial institutions, but will not tolerate any violations of the laws as offenders will be appropriately sanctioned.

In this regard, the Banking Supervision of the Bank of Ghana has urged all potential savers and customers of any financial institution -- particularly savings and loans or microfinance -- who are unclear about the status of any financial institution parading as a savings and loan or microfinance to seek the status of such institution and demand proof of licence before dealing with them.

Mr. Raymond Amanfu gave the warning on behalf of the head of Banking Supervision, Bank of Ghana, Mr. Franklin Belnye, at the inauguration of Sinapi Aba Savings & Loans in Kumasi last Friday.

He said good corporate governance is at the heart of any successful business, and urged both board and management to adopt a high level of corporate governance practices that will help to clearly identify, measure, control, and mitigate the risk associated with their operations.

“As a new savings & loans company, you must put in place adequate measures to address, especially, operational and credit risk challenges facing a number of institutions,” he advised.

He further cautioned that the management of Sinapi Aba Savings and Loans should be mindful of branch expansion, as the exercise must be done with BoG’s approval supported by adequate capital, high calibre staff, and strong IT infrastructure. Access to credit, he mentioned, continues to pose a serious challenge to SMEs.

He therefore encouraged Management of Sinapi Aba Savings & Loans to take proactive steps to identify the credit needs of their clients and provide them with the needed financial support, management, competent skills, and well-organised regular interaction sessions in an effort to grow them into a viable entity.

The Bank of Ghana granted the SASL the licence to operate because the Central Bank has confidence in the Board and Management and believes that they will play their role with due regard to the provisions of the Banking Act 2004, Act 673, as amended and other directives.

The savings and loans industry is one of the fastest-growing sub-sectors in the financial sector of the Ghanaian economy. The industry has 22 companies as at May 2013, with total assets of GH¢1.777million. This represents a growth rate of approximately 90% over its total assets in 2012, which stood at GH¢937.40 million; and between January 2013 to the end of May 2013 the industry recorded a growth rate of 34.17%, indicating a good start for 2013.

It is therefore the desire of the Central Bank to broaden the financial intermediation spectrum using institutions such as Sinapi Aba Savings and Loans to link up the unbanked population, especially micro-, small- and medium-scale enterprises with financial services providers.