Bank of Ghana denies raising the minimum capital requirement for the savings and loans companies

The Second Deputy Governor of the BoG, Elsie Awadzi while at the annual general meeting of the Ghana Association of Savings and Loans companies (GHASALC) made the revelation.

According to her, there was a talk at a point on raising the minimum capital for the sector but the central bank has not made a decision yet.

“There was a talk at some point about increasing the minimum capital, we have made no decisions yet. Let me assure you that we don’t make those decisions just sitting there by ourselves, we engage, and we will engage the Association and its membership on such issues so you won’t be taken by surprise,” she said

Madam Awadzi also charged savings and loans companies to re-brand with innovative products to help drive the agenda of financial inclusion.

She explained that considering the contribution of mobile money in the financial sector, technological innovation should be the next step to strengthening the foundation of the savings and loans sector.

There are currently about 39 savings and loans companies and 22 finance houses, with almost a quarter of them in distress, a situation which analysts say requires a shake-up.

Only eight out of the 39 companies operating in the savings and loans sector have paid-up capital above the minimum amount of GH¢15 million.

It is expected that the central bank will seek to enforce the existing minimum threshold of GH¢15 million as part of the reforms of the sector to ensure that those that are not able to meet their capital requirements lose their licences.

This is because the quality of assets in the sub-sector has been troubled by the record of high non-performing loans (NPLs).