Prof Peter Quartey, Head of the Economic Department of the University of Ghana, has said though the Bank of Ghana policy rate declined consistently, it has not had any significant effect on the lending rates in the country.

He said the macro-economic environment within the country has also been relatively stable during the year and this has impacted the money market rates.

Prof Peter Quartey said this during the Annual General Meeting of the University of Ghana Co-operative Credit Union in Accra on Thursday.

“Despite these difficulties, we maintained our interest rate on loans at 27 percent, which is much lower than what prevailed on the financial market, when you factor in monitoring and processing fees charged by the various financial institutions,” said Prof Quartey, who is also the Board Chairman for the Union.

He said “our loan approval turnaround rates have been excellent. We have tried to process loans within 48hours and in most cases, less than 24 hours.”

Prof Quartey said whilst the Treasury Bill rate and other money market instruments also declined, which “negatively affected our earnings” on liquid investments, “the Credit Union paid good returns on savings during the year.”

He said whereas average interest rate on savings stood at below 6 percent per annum, the Credit Union paid an average interest of 15 percent per annum on member savings.

“These factors made our Credit Union an enviable financial institution within the country,” said Prof Quartey.

He said the Management Board of the University of Ghana Credit Union adopted strategies to promote and develop the Union including instituting capacity building efforts, under which there were sponsored seminars and training programs for staff.

He said at the recent Biannual Conference, the University of Ghana Credit Union was judged the best credit union saying “though we pride ourselves as one of the best in the country, our staff always attend meetings in taxis, while others arrive in buses with their names boldly written on them.”

Prof Quartey said at the end of the 2011/2012 financial year, the Union made a net surplus of 920,669.77 Ghana cedis, representing a return of 6 percent on total average asset size, and a 9.3 percent growth over the previous year’s surplus.

He said the Board adopted operational strategies of deposit mobilization and reviewing loan qualification ratios regularly, leading to an asset growth of 41 percent between July 2011 and June, 2012.

“Despite the difficult operating environment, especially when interests on investments were falling, we managed to pay interests on savings of 15 percent per-annum, as against 13 percent paid last year,” said Prof Quartey.

He said that meant “we paid 1,472,117.37 Ghana cedis as interest on savings in 2012, as compared to 857,738.55 Ghana cedis paid in 2011.

Prof Quartey said the union’s management was committed to maintaining the conventional practice of paying dividend at the end of each financial year.

“In order to maintain a decent return on share investments in the face of increased members’ investments, the Board proposes to increase the dividend payout ratio from 30 percent to 38 percent of the net surplus, which amounts to 349,854.51 Ghana cedis.”

He said the numbers of the Union continues to grow, with membership standing at 4,103 presently, as against 3,664 at the beginning of the financial year.

Prof Quartey said as part of the Union’s strategic plan for the next financial year, the Board had considered the introduction of Kiddy accounts, current and salary accounts and ATM services.