Banking consultant blames micro-finance problems on greed, lack of education
A banking consultant, Nana Otuo Acheampong, says greed and lack of education among some Ghanaians who pursue unrealistic high interest rates are the cause of recent problems on the micro-finance front.
According to him, because some of the customers are bent on doubling their investments in the shortest possible time, they easily fall victims to some microfinance Institutions (MFIs) who deceive them with unsustainable interest rates on their deposits.
Recently, agitated customers of DKM Diamond Microfinance in Sunyani whose investments have matured stormed the premises of the microfinance company due to delays in the release of their monies.
They were asked to wait for three months, that is until the Bank of Ghana concludes an audit into the operations of the company, creating tension and dissatisfaction among the investors.
Similar incidents have been reported in Wa,Techiman, Nkoranza, Koforidua, Ho, Brekum, Bolgatanga, Kete Krachi and Dambai.
Speaking Monday on Adom FM’s “Burning Issues” programme with Afia Pokua, Nana Otuo Acheampong said investors need to be vigilant.
“Sometimes I don’t understand why some customers rush in for unsustainable rates of between 30 per cent and 55 per cent every two months” Mr Acheampong said.
Nana Otuo Acheampong stated that the Micro-finance institutions, the Bank of Ghana (BoG) and other stakeholders must take it upon themselves to educate Ghanaians about the dangers involved in those high unrealistic interest rates.
Beige Capital adjudged best savings and loans company
Beige Capital celebrated a successful evening at the third Made in Ghana Awards (MIGA 2015) when it was adjudged the best Savings & Loans Company and inducted into the ‘Made in Ghana Hall of Fame’.
The bank was also highly commended for its general banking and investment services in the Financial Services Provider category.
The event was organized by Entrepreneurs Foundation of Ghana (EFG), under the auspices of the ministries of Trade and Industry, Finance and the Ghana Standards Authority, on the theme: “Nationalism, the key to Social and Economic Development”.
CEO of Beige Capital, Mr. Mike Nyinaku, said he was hopeful that very soon some indigenous Ghanaian companies will outgrow their boundaries in Ghana and strongly represent the country on the global landscape.
He commended the EFG and its president, Mr Sam Ato Gaisie, for creating a worthy platform to promote made in Ghana products and services.
Mr. Gaise, during an interview before the event said, “It is about seeking the pride of Ghanaian indigenous twenty (20) most celebrated high quality and competitive products and services to create awareness, provide a boost to the business profile and reputation, increase the products’ credibility in international markets and build product loyalty to save the local manufacturing industries from collapse”.
BoG urged to relax savings and loans regulations
The Divisional Head of Marketing at The Seed Funds Savings and Loans, Mr Derrick Ewudzie-Odoom, has called on the Bank of Ghana (BoG) to allow savings and loans companies in the country to undertake international transactions.
That, he said, was necessary because it would help the savings and loans organisations to grow their capacity both in Ghana and overseas.
Mr Ewudzie-Odoom, told the Graphic Business in an interview on the sidelines of a boot camp in Accra.
According to him, it was time the central bank relaxed some of the regulations governing savings and loans companies in the country.
“What we think the Bank of Ghana should do is to allow the savings and loans companies to transact foreign business just as the universal banks in order to improve its operations across the world,” he said.
He said per the directive governing that sector, the savings and loans institution in the country could not transact foreign business, a situation he said was affecting the companies negatively in the sub-sector.
He said savings and loans companies must be given the same opportunities to operate as the universal banks in order to inject speed into their business transactions.
He said some of the savings and loans companies were bigger than banks in terms of reach, capital and capacity to grow and expand.
Mr Ewudzie-Odoom said The Seed Funds believed in serving its valued customers in the best and effective way, and therefore relied heavily on technology and innovation to achieve that feat.
“At The Seed Funds we have a team of managers who have done it before, because we have been in the business of banking for many years and, therefore, understand the dynamics of the Ghanaian banking environment,” he explained.
The company prides itself on having a strong capital base and robust IT platform, coupled with a very experienced and diversified board of directors.
MTN appoints temporary CEO
Johannesburg – MTN has appointed appointed Phuthuma Nhleko as Executive Chairman in a temporary capacity as Sifiso Dabengwa resigns as CEO.
The boss of Africa’s biggest mobile company, MTN, resigned after receiving a $5.2bn (£3.4bn) fine from Nigeria.
Chief executive Sifiso Dabengwa tendered his resignation with immediate effect, saying it was
“in the interest of the company and its shareholders”.
The fine, which amounts to double MTN’s profit last year, was for failing to cut off unregistered mobile users.
The boss of Africa’s biggest mobile company, MTN, has resigned after receiving a $5.2bn (£3.4bn) fine from Nigeria.
Chief executive Sifiso Dabengwa tendered his resignation with immediate effect, saying it was “in the interest of the company and its shareholders”.
The fine, which amounts to double MTN’s profit last year, was for failing to cut off unregistered mobile users.
In a statement from MTN few hours after, the appointment of a new CEO was announced.
BoG under pressure to bring down interest rates
The steady increase of the Bank of Ghana’s policy rate to 25 from 19 per cent at the beginning of the year has given policy makers some breathing space with stable currency but worries over cost of borrowing lingers.
Despite the favourable and handsome profits enjoyed by financial institutions in the country, the cost of borrowing is still high for the average Ghanaian, a phenomenon which has sparked another round of calls for action to bring it down.
Until recently, the Monetary Policy Committee (MPC) of the Bank of Ghana had maintained a fairly stable prime rate—the reference interest rate used by the banks—and yet, on the ground, banks and other loan companies do not reflect this in their lending practices.
The adjustment in the policy rate last September to 25 per cent was to offset the risk of inflation, which according to the BoG “has pushed up the disinflation path further from the target in the horizon, and monetary policy needs to be vigilant to avoid a build-up in inflation expectations,”
But it is the high cost of borrowing from the banks and other financial institutions that has got people talking.
Ghana’s wood furniture industry on the road to revival
Yusif Momeen is a master craftsman in wood furniture manufacturing in the Upper West region.
In years past, he has had challenges in producing knock-down or flat-pack furniture, which entails artistic joinery to assemble and dismantle a piece of furniture.
Today, Yusif says he has acquired new skills and knowledge to produce furniture that can compete with others the world over.
“There is no need for people to travel out of Ghana to China to bring in products,” he said. “Currently I can say the woodworkers have upgraded our knowledge and we know very well that if more support is given to us, we can even do more than what is produced in China”.
The influx of foreign furniture and other wood products into Ghana has compelled many local woodworkers to fold up their businesses.
Imports of furniture are estimated at an annual $60million. The resultant impact is a reduction in the contribution of woodworkers to the country’s economy, especially in job creation, revenue generation and poverty alleviation.
Research indicates the real estate sector has championed the importation of furniture to the neglect of the local industry.
GRA upbeat about revenue growth
The Customs Division of the Ghana Revenue Authority (GRA) is upbeat about increased revenue generation after a successful implementation of the Pre-Arrival Assessment Reporting System (PAARS).
The implementation of the PAARS has enabled the various stakeholders and clearing agents to get their clearing documents processed in less than 48 hours at the country’s various ports.
PAARS is a modernised system that has been developed by the Customs Division of GRA as part of the implementation of the National Single Window system to enhance revenue mobilisation, improve border security and customs clearance, overcome duplication across regulatory agencies and promote trade facilitation.
Ms Christiana Akoto-Bamfo, Sector Commander, Accra Collection, Ghana Revenue Authority (GRA), Customs said “PAARS has helped fish out the bad eggs in their caucus, as the robust and fast system has put an end to corruption when clearing of goods comes in place”.
“Ghana Customs has proved critics wrong by successfully taking over its operations from the Destination and Inspection Companies (DICs) and maintained an upward integrity so far”, she said.
“Trade Facilitation for Ghana remains the heartbeat of its development, it is key to allow for the free flow of trade and overall, the results suggest that mostly Ghana economy will have great benefits from the successful implementation of trade facilitation thus the need to take concrete steps towards streamlining trade procedures”, she added.
Investor confidence in Ghana rising
The Executive Secretary of the American Chamber of Commerce – Ghana, Mr Simon Madjie, has said investor confidence in the local economy is being restored; two months after the corruption scandal that rocked the judicial service.
The judicial scandal, which was exposed by ace investigative journalist, Anas Aremeyaw Anas, in September this year left many investors in a state of anxiety as the confidence in the judiciary waned.
Answering questions at a news briefing organised by the chamber to announce a new business initiative designed by the American Chamber of Commerce for Africa, Mr Madjie said the manner in which the scandal was being handled so far was enough to revive the confidence.
“I think that we have already made our point on that issue and what we said was very simple, if this is handled in an open and transparent manner, which I think is being done now, then investor confidence will surely return,” he said.
The news about corruption in Ghana’s judicial sector in September 2015, has added to the woes of a country which is already battling some major economic crises.
The scandal led to the interdiction of some lower court judges as well as some high court judges who are presently facing a judicial committee set up by the Chief Justice, Her Ladyship, Justice Georgina Wood.
Credit: Joy Online, Graphic
