Business News of 2014-01-13

‘Credit unions good vehicle for savings’

Mr. Tony Dzadzra -- Head, Tax Policy Unit of the Ministry of Finance and Economic Planning, says credit unions provide base capital for small business ventures and play a crucial role in the country’s financial sector.

“Credit unions in the country support the microfinance policy initiative in creating an enabling environment for small and medium enterprises to expand their ventures and to provide employment avenues for the youth.

“Credit unions are good vehicles of savings mobilisation, and a country that does not save loses out on investment,” he said.

Mr. Dzadzra made these statements on behalf of the Minister for Finance and Economic Planning at the seventh Annual General Meeting of the Ghana Revenue Authority Cooperative Credit Union (GRACCU) in Accra.

Mr. Godwin Aaron Monyo, Chairman of the Management Board of GRACCU, speaking under the topic ‘Financial Independence, Our Goal’, said: “Today, credit unions have become big-time businesses competing for scarce investment funds from the common capital market.

It has become imperative for the leadership of modern credit unions to be innovative and shrewd in designing products that can bring in more income and, in the long -run, maximise the earnings of the contributors”.

He said the aim of the union is to secure financial independence for members to adequately prepare them for retirement, adding: “Management will not shy away from bold decisions that will bring good returns to the union.

“It was in the pursuit of this objective that the union facilitated an agreement with JMET Corporation of China to acquire 300 mini-buses for members to own and operate as commercial vehicles.”

Mr. Monyo said GRACCU is attracting investors’ attention, particularly Marvel Properties Limited, an estate developer that has expressed interest in providing Ghana Revenue Authority (GRA) staff with affordable houses.

The estate company, he said, has proposed an affordable housing scheme through the credit union for the staff -- and added that the houses will be given as mortgages over a 10-year period.

Mr. Monyo observed that the demand for withdrawal by members who are servicing loans poses a threat to the continued existence of the union.

“The long-term effect of the withdrawal denies the union necessary funds for gainful investments for the members as a whole.” GRACCU as at June 2013 had a membership of 4,219 with total assets of GH¢16.9million.

Some members received awards for their contributions toward the growth of the union. They received items including water dispensers, television sets and cash.

GRACCU was inaugurated on December 10, 2010 and began as the Internal Revenue Service (IRS) Credit Union.