Finance houses asked to guard against risks
A risk management consultant, Nicholas Okoe Sai, has tasked finance houses in the country to put in place strong risk management mechanisms as they engage in activities that seek to add value to both business and clients.
Mr. Sai, who until now was the Head of Banking Supervision Department of the Bank of Ghana, also encouraged finance houses to build on their level of risk awareness since it will help them to develop a healthy risk culture to be more proactive in dealing with the various threats to their business.
Speaking at the second annual general meeting of the Association of Finance Houses (AFH) in Accra, he said: “The ideal approach will be for the finance houses to be more proactive by identifying risks and building appropriate mitigating strategies.
“Proper risk control helps in the realisation of planned objectives and improved outcome as it enables accountability, transparency and responsibility.”
According to the seasoned accountant, all businesses exist to provide value for stakeholders and that quest for value addition activities come with various risks which when not addressed could erode the intended value.
He defined risk in a finance house to be instances where an action could have an adverse impact that will either result in a direct loss of earnings or may prevent the institution from achieving its business objectives.
He added: “Finance houses by their activities are exposed to a number of risks including credit risk, operational risk, market risk as well as both country and cross-border risk and all of these much be adequately put to check.”
The Association of Finance Houses (AFH) has been formed to promote the interests and operations of all licensed finance houses by liaising with the Bank of Ghana and other regulatory agencies on matters concerning its members.
The AFH is also focused on educating the public on the products and services of member finance houses while encouraging capacity building for employees of member institutions particularly in the areas of good corporate governance.
The annual meeting provided the platform for stock-taking of the various activities that the association carried out in the previous year while member institutions discussed how to grow their business and membership base.
President of the AFH, Oko-Nikoi Dzani encouraged members to go about their business in a professional way as they battle identity crisis in the wake of dimming public confidence in the microfinance sector.