Non-Bank Financial Institutions (NFIs) must institute robust systems and procedures to ensure the sustainability of the industry, Second Deputy Governor of Bank of Ghana (BoG), Mrs Elsie Awadzi Addo, has stressed.
"There is a widely held perception that the microfinance sector has to be made up of small institutions with watered down systems and procedures. This view has resulted in some players often settling for less robust systems and procedures," she said at the maiden NFIs Awards and Dinner Night organised by the Ghana Microfinance Institutions Network (GHAMFIN) in Accra on Thursday.
She said "while there may be short-term economic justifications for this, in the long run it leads to weak corporate control systems and operational inefficiencies which is more costly and undermine sustainability,"
Supported by MTN, Bankingly, StarMicro and Starlife, the programme was on the theme "Enhancing Non-Bank Excellence and Credibility during Disruptive Periods."
In all, 60 organisations comprising savings and loans, rural and community banks, microfinance companies, credit unions, micro credit companies, financial non-governmental organisations, susu enterprises were awarded for their exceptional performance and also special awards were given to organisations that contributed to the development of the industry.
The Second Deputy Governor in the keynote address delivered on her behalf by Mrs Patience Yeboah-Nkansah from the Other Financial Institutions Supervision Department of the BoG, said microfinance institutions could be strong and efficient institutions.
"It is even possible for even small institutions to be better controlled, better organised and efficiently managed with the right corporate governance and risk management practices, adequate capital and responsible pursuit of growth," MrsAddo said.
MrsAddo said the BoG and the Ministry of Finance and the World Bank had been conducting diagnosis study to help position the sector to better contribute to financial inclusion and growth of the economy.
The Second Deputy Governor commended GHAMFIN for organising the award to promote excellence in the sector and urged the organisation to step up its supervisory role to ensure compliance of its dictates.
The Head of Banking and Non-Banking Unit Financial Sector Division of the Ministry of Finance, Andrew KudzoAmeckson, in his address pledged government's commitment to help the NFI sector to thrive.
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He said the government was supporting number of initiatives including giving financial assistance to some member organisations of GHAMFIN to procure Information Communication Technology infrastructure to improve their operations.
The chairman of the GHAMFIN Board, Mr Bernard Joe Appeah, said the objective of the awards was "to celebrate excellence, showcase well performing, efficient, transparent, credible and compliant members," of the seven member associations that make up GHAMFIN.
He said in spite of the dent the financial sector clean-up had on the banking and financial industry, the Non-Banking Financial industry continue to support the socio-economic development of the country.
"The 1933 member companies of GHAMFIN serve 13,818 million clients with a combined asset of GH¢16, 330 billion. In the year 2021, the member companies disbursed loans in excess of GH¢10.8 billion, of which 45 per cent was given to Micro Small and Medium Enterprises mostly in Rural Ghana, contributed 3.7 per cent to GDP, provided employment for approximately 30,000 people out which 42 per cent were women," MrAppeah said.
