The Swedru Teachers’ Cooperative Credit Union is urging the government to put in place mechanisms to ensure that funds locked up in other financial institutions regulated by the Securities and Exchange Commission (SEC) are released.
According to the CEO, Joseph Acquaye, some microfinance institutions and credit unions have their funds locked up in these financial institutions, which is crippling their operations.
He mentioned that institutions such as Gold Coast Securities and Brooks Investment were affected during the government’s financial sector clean-up and that some credit unions and individuals have their money locked up as a result.
Mr. Acquaye wants the government to put in place mechanisms to ensure that the funds are released to the investors. He believes that once these funds are released, they will inject capital into the microfinance and credit union sectors, while also creating jobs.
“Some microfinance and credit unions were affected during the financial sector clean-up by the government because they had their funds deposited in other larger financial institutions that were affected during the clean-up. It is important to note that some microfinance and credit unions that have their funds in these institutions are struggling to operate, and if care is not taken, their operations will be crippled,” he told Citi Business News.
Mr. Acquaye also wants the government to consider granting tax breaks to some microfinance institutions, just as it does for certain foreign organizations. He believes that this will encourage others to invest more in the sector.
“Just as the government does for other institutions that come into the country to operate, the same should be done for some local financial institutions by granting them tax breaks so that they can operate effectively,” the CEO of the Swedru Teachers’ Credit Union said.
Highlighting some of the challenges the credit union faces, Mr. Acquaye said that the Ghana Card must be enhanced since it is now the sole identification document to be used for any transaction. He believes that if the card is enhanced, it will be easier for financial institutions to access the credit rating of any client when it comes to loan acquisition and recovery.
“The Ghana Card is a very good thing, and I think the government should enhance it with more security features to help financial institutions recover loans from clients and access the credit ratings of clients before loans are even disbursed. This will also help credit unions and microfinance institutions to recover loans from clients. It also means that you cannot just access loans and then throw away your SIM card while depositors’ money has been given to you,” Mr. Acquaye noted.
