Wa Co-operative Credit Union records 80% profit decline

The net surplus of the Wa Co-operative Credit Union (WACCU), reduced from Ghc435,000 in 2013 to a meager amount of Ghc87,000 during the 2014 financial year, representing a decline of 80 percent in profit.

The Credit Union, therefore, failed to achieve its budgeted surplus level of Ghc700,000.

Mr. Moses N. Donneyong, Board Chairman of WACCU, who disclosed this at the Union's Annual General Meeting (AGM), attributed its poor profitability performance to the inability of most members to repay their loans.

He said the situation brought about low income from loans, as well as the need to provision against loan losses, which affected the Union severely.

Mr. Donneyong noted that total income for the year was Ghc1,700,000, as against a targeted amount of Ghc2,900,000, adding that the Union also made a loan loss provision expense of Ghc70,000, which hit the bottom resulting in the poor profitability showing for the year.

The WACCU Board Chairman said several reasons accounted for the poor loan repayment picture during the 2014 financial year.

“Our contract and farmer loaners were the most hit, as government failed to pay contractors, while the market for agricultural produce dwindled.

Mr. Donneyong said the 2014 financial year proved to be the most challenging year ever for the WACCU, which resulted in the implementation of a very tight expenditure management regime, as incomes were not forthcoming.

He said total expenditure stood at Ghc1,100,000; including a suspension write-off amount of 140,000 Ghana Cedis and the loan loss provision of Ghc72,000.

He said, the Union also managed to keep expenditure at 50 percent below the budgeted level, as some less strategic projects and activities were curtailed.

The WACCU Board Chairman stated, however, that the Union saw some mean growth in the total asset size during the year, from Ghc8,000,000 as at June 2013 to Ghc8,600,000, representing a growth rate of 7.5 percent.

Mr. Donneyong noted, however, that WACCU had continued to register a cleaner asset quality year on year, as all non-realistic assets, such as the suspense account, were gradually being eliminated from its balance sheet through write-offs.