New minimum capital for savings and loans companies

The Bank of Ghana (BoG) will soon announce a new deadline for all Savings and Loans Companies to meet the new minimum capital requirement of GH¢15.0 million.

Dr Henry Kofi Wampah, BoG Governor, in a speech read on his behalf by Mr Stephen Amegashie, Assistant Director at the Governor’s Department during the launch of ABii

National Savings and Loans Limited in Accra at the weekend, urged the shareholders to put a plan in place to meet the revised capital requirement.

He said it was estimated that there were 2.5 billion adult people worldwide who did not have access to formal financial services.

The Governor said according to the World Bank’s Global Findex Surveys, almost 80 per cent of those living on incomes of less than $ 2 per day were financially excluded.

He noted that in Ghana, the empirical evidence was that over 60 per cent of the adult population was unbanked; this he said showed that there was room for ABii National to contribute its quota to the financial landscape in Ghana.

“As a country, we have over the years been saddled with the challenge of evolving strategies for poverty reduction by raising incomes of low income households and broadening access to financial markets.

“The formal banking system in developing economies such as ours tends to ignore the low end of the market which it perceives as risky and unviable.

“This has prevented banks from making inroads into that segment of the market. However, this provides a fertile market for institutions like ABii National Savings and Loans to capture,” Dr Wampah said.

He said the entry of ABii National into the financial service industry of Ghana would obviously increase the existing competition to the betterment of customers.

Dr Wampah said the needs and demands of modern day customers were totally different from that of a decade ago, and satisfying these sophisticated needs require different approaches without exposing the company to avoidable risks.

Mr Cassiel Ato Forson, Deputy Minister for Finance in a speech read on his behalf by Mr. Joseph Chognuru, a Director at the Ministry, said the small and medium enterprise (SME) sector was very critical to the accelerated economic development and growth agenda of the country.

He said the SME sector not only dominates the business sector, but was also a leading contributor to employment, estimated at about 60 per cent of total employment.

He said available data indicated that about 90 per cent of companies registered are micro, small and medium enterprises, declaring that this target group has also been identified as the catalyst for economic growth.

He therefore, urged all non-banking financial institutions, particularly ABii National Savings and Loans to assist these enterprises by making credit more affordable and accessible.

Mr Godfried Osei-Boakye, Managing Director of ABii National said the company was established in September 2011 with a provisional license to operate.

He said after the official approval of a full license in February 2013 by the BoG, the financial institution launched into operations in September 2013 at its Avenor premises which house both a Branch and the Head Office.

He said ABii National could now boast of six running branches at Avenor/head office, Abossey Okai, Darkuman-Kokompe, Kasoa, Adum – Kumasi and Mallam Atta, while our seventh branch in Takoradi will be on board soon.

He said the vision of ABii National is “to be the most desired indigenous bank, partnering with our customers to unlock their financial potential and be seen as the key to excellent banking’’.

“ABii aims to become a first class universal bank of choice by deploying the best personnel and technology to deliver excellent banking services to all customers and increasing shareholders value’’.

Mr Osei-Boakye said all the six branches were fitted with state of the art Automated Teller Machine (ATMs), with an offsite ATM at the Korle-Bu ATM Farm.

“After two months of operation and with one branch, ABii managed to close the year 2013 with a deposit of GH¢3.9m and a loan portfolio of GH¢308,000.

“Our current deposit position is GH¢17.8m while loans and advances is GH¢10m, with Non-Performing Loans ratio of one per cent,” he stated.