The Executive Secretary of the Association of Savings and Loans Companies (GHASALC), Mr Tweneboah Kodua-Boakye, says the novel coronavirus pandemic has brought so much pressure on the liquidity position of their members due to the increase in the demand for loans and withdrawals.
“There been an increase in withdrawals which is expected because the customer is not generating more revenue and so the small they have with their respective financial institutions they come and withdraw”, he said.
Consequently, the GHASALC Executive Secretary, says this affected the ability of the Savings and Loans Companies to extend credit facilities to their clients in the magnitude that they would have done prior to the covid-19 pandemic.
Speaking on Joy Business Market Place, which was monitored by the Ghana Talks Business, Mr Kodua adds that the flipside to their current situation is the fact that even the few loans they had given out are becoming difficult to recover.
This, he adds, is making it difficult for the Savings and Loans Companies to get the needed inflows to meet the financial demands of their clients. This has tightened the liquidity for the savings and loans sector.
Interest on Deposits
Again, he adds, that the Savings and Loans Companies are also paying interest expense on the deposits that they had mobilized despite the fact that the loans that they had given out, which would have generated some revenues for them, are not being paid back.
“And so, the reality is that you would need to get an external support one from the shareholders, but these shareholders also have their respective business hard hit so the next person to fall on is the government. There is no economy that can survive if government doesn’t come in”, he said.
Therefore, Mr Kodua says the Association of Savings and Loans Companies are engaging the central bank to see how best it could help them with a stimulus package turn around their fortunes.
“We believe the government is thinking about how to position the sector [financial sector] because no government will throw billions of cedis into the banking sector and leave it to collapse. So, we are very confident the government has good intentions for us”, he concluded.
Ghana’s case count
Ghana’s case counts for the covid-19, as at 10am, Tuesday, May 12, 2020, now stands at 5,127 and out of this number 494 patients have recovered and 22 people have lost their lives.
By Salifu B.B. Moro