The Governor of the Central Bank Dr. Henry Wampah has lamented that low capitalisation of Non-Banking Financial Institutions (NBFIs) in the country still remains a worry to the Bank of Ghana (BoG).

“As we speak a number of them remain below the capitalisation, which is worrying,” Dr, Henry Wampah noted.

The central bank minimum capital requirement for mortgage and leasing companies that operate under the Non-Bank Financial Institutions Act, 2008 [Act 774] require not less than GH¢10million as minimum capital, while money-transfer companies require not less than GH¢7million.

In the case of foreign ownership, not less than 60 percent of the required capitalisation should be brought into the country in convertible currency.

However, despite the stipulated minimum requirement by the Bank of Ghana, there are still a number of non-banking financial institutions operating below the set point.

Mr. Wampah made these comments when he inaugurated the Association of Finance Houses (AFH) in Accra, which was under the theme ‘Finance Houses: Championing the financial needs of businesses in Ghana’.

The Association is made up of 24 licenced financial institutions engaged in the business of project finance and management, equipment leasing, hire purchase, debt administration, debt factoring and securitisation, export financing, and LPO financing as well as funds management.

The central bank Governor however underscored the importance of finance houses to the growth of small and medium-scale enterprises, which form the mainstream of the country’s economy.

“Most SME businesses in Ghana believe the singlemost important factor constraining their growth is lack of finance. Financial institutions, especially banks, on the other hand have been overly-cautious with lending to such business because of perceived high default rates and associated risks.

“With the intervention of institutions such as yours over the years, we are witnessing a gradual improvement in access to credit by SMEs,” he noted.

Currently, the number of non-banking financial institutions stands at 26 as at the end of June this year. During this same period, according to BoG the sector comprised about 10 percent of banking industry total assets.

Chairman of the inauguration event Kwame Pianim urged the association to utilise technology to improve efficiency: “Set your standards higher than the regulatory minimum by exploring the growing IT landscape,” he said.

Among the Association’s objectives are: to educate employees and the public of their products and services; staff training; and cultivating harmonious relationships with regulatory bodies such as the Bank of Ghana, among many others.

The President of AFH, Oko Nikoi Dzani, noted that the Association will also serve as a peer-check mechanism; ensuring members conform to accepted practices and regulatory requirements.