Accra, July 21, GNA- The Ghana First Building Society (FGBS) is to be transformed into a full-fledged non-banking financial institution capable of raising deposits to operate as a viable mortgage financier. This follows government's decision to introduce a Bill in Parliament that would transform the FGBS under the Companies Act and existing non-banking financial institutions laws, with wider financial service functions.

Mr Daniel Charles Gyimah, Managing Director of the National Investment Bank (NIB), who is chairman of the new board of directors of the FGBS, said they would work to change the existing law establishing the FGBS to enable it to take a firm position in the mortgage financing industry.

He was speaking to the Ghana News Agency (GNA) Business Desk on Monday after Dr Anthony Osei-Akoto, Deputy Minister of Finance and Economic Planning had inaugurated the five-member board. Mr Gyimah noted that the FGBS has large tracts of land all over the country, especially outside Accra, "and this would be of immense value to our being able to develop affordable housing facilities for workers and individuals".

Set up as the first mortgage financier in Ghana on June 15, 1956, the FGBS has been without a board since the early 1990's. Members of the new board are Mrs Rose Fosuh of the Ghana Trade Fair Company, Mr Zakari Sumani, Ministry of Works and Housing, Mr Paul Agyiri, Chief Director of the Ministry of Finance and Economic Planning and John A. Ackah, Acting Managing Director of the FGBS.

Mr Gyimah noted that the Home Finance Company (HFC) has done well so far, "but with our advantage of existing land across the country, we hope to take a commanding feat in the industry". He said when the new board puts the FGBS in the new law it would also be able to accept foreign deposits, which would curb the exchange losses facing it.

Mr Gyimah said the new board would examine the Building Societies Ordnance (Act 30 of 1955) and ensure that a definite line of action is taken.

He admitted that the inability of the FGBS to attract subscriptions, enough capital from government as well as private capital could be due to the name - Society, - which often gave the impression that it belonged to a certain class or group of persons.

The objective of FGBS was to raise funds through subscription out of which advances would be made to members upon the security of freehold or leasehold property, by way of mortgage.

By nature, the Society embraces investment members consisting of ordinary shareholders, savings shareholders, preference shareholders and advance shareholders or mortgagors.

Dr Osei-Akoto said it is sad that the FGBS has declined to such an extent that Ghanaians are just not aware about its operations. He attributed this to the rapid depreciation of the cedi against major foreign currencies since the 1970s, constraint of operating the Ordinance, which limited its operations, and the inability of the society to re-capitalize itself to meet the challenges of the times.

Dr Osei-Akoto said the loan recovery rate of the Society has been very low, depriving it of capital to enable the body to sustain the package, adding that the new board should work to change it. He said government has initiated a "Housing the People Scheme" through which it would facilitate the building of 20,000 units in the Eastern Region and 90,000 units in the Greater Accra Regions for rental and direct ownership. He said 120 million dollars has been secured for the project and the first phase is scheduled to begin later this year or early next year.

He said a revamped FGBS and existing mortgage financial institutions would have significant roles to play in implementing government's plans to solve the housing problem for majority of Ghanaians.

"We are convinced that a successful transformation of the FGBS will lead to the deepening of mortgage finance in Ghana, creating the opportunity for other institutions to specialize in secondary mortgage financing."