Business News of 2013-12-24

Scheme to protect members of credit unions

A scheme to safeguard the financial contributions made by members of credit unions in the country in the event of collapse has been launched at Kasoa in the Central Region.

The scheme, the “Deposit Guarantee Scheme” (DGS), is the first in Africa and was established by the Ghana Co-operative Credits Unions Association (CUA) to ensure that members do not incur financial losses when their unions collapse.

Under the scheme, credit unions would contribute to a deposit guarantee fund, an amount based on the accumulated deposits of members every year.

It would also monitor the performance of credit unions to identify the possible problems that may lead to their collapse and provide necessary corrective measures.

Systems would be established to implement safe and sound business standards in credit operation which would uphold the integrity and the corporate image of the unions in the country.

The scheme would also offer protection and security for credit union members’ savings and deposits among others.

Launching the scheme, the Board Chairman of the CUA, Mr Charles Esuah-Yeboah, indicated that the DGS has the vision to make credit unions permanent, strong and beneficial institutions with the adoption of effective technologies in their business.

He explained that, the long term viability, reliability and competitiveness of the country’s credit union system would be assured if there was adequate protection of members’ savings and deposits, payment of market rates return on savings and shares and adequate liquidity to allow members to withdraw their savings when needed.

“The Deposit Guarantee Scheme seeks to realise these indicators” Mr Esuah-Yeboah added.

According to him, the DGS aims at making the Credit Union one of the most dependable sources of quality financial services to its members.

“It is to give every assurance to members that their interest is forever secure no matter what happens to their unions,” Mr Esuah-Yeboah said.

The Executive Secretary of Ghana Microfinance Institutions Network, Mr Yaw Gyamfi, stated that Ghana’s credit unions were well known everywhere because of their innovations and lauded CUA for the new addition to ensure quality service delivery.

He also lauded the association for its commitment towards the welfare of its members.

Mr Gyamfi expressed the hope that the new scheme will improve the lives of Ghanaians and enhance the corporate image of the credit union in the country.