Credit unions have been urged to reposition themselves by improving their operations in the country to better meet the demands and needs of the people to be able to make significant contributions to national development post-COVID-19.
Minister for Employment and Labour Relations, Ignatius Baffour Awuah, made the remarks on the back of the dreadful toll the COVID-19 pandemic has had on businesses and a lot of people’s livelihoods, imposing uncertainty about the future and compelling the adaptation of new ways of operating business.
According to the minister, who was speaking at the 21st Biennial Conference of the Ghana Co-operative Credit Unions Association (CUA), the continued relevance of cooperatives in national development is very crucial and more so, in this pandemic time as all development partners and industry players has been compelled to review their preparedness for unforeseen challenges.
In a speech read on his behalf, he emphasized that the financing gap in the informal economy and micro or small-scale enterprises can be addressed by credit unions and other non-bank financial institutions, echoing that there is a great need for capital injection into the informal sector which commands about 90 percent of economically active persons.
“This gab created is being filled by cooperative credit unions and other non-bank financial service providers but the task now is how to deploy new and more innovative ways of addressing the problem,” he said, reiterating that the onus is on the cooperatives to adopt new technologies as it is becoming the new way of doing business, develop new products and innovate to meet specific needs of the market and affirm sustainability.
Director-General of Securities and Exchange Commission (SEC), Daniel Ogbarmey Tetteh, taking his turn, reiterated that a developing country like Ghana, needs cooperative credit unions and non-bank financial service providers to grow the economy as they provide the much needed capital in both short and long term to drive economic activities especially in the informal sector.
He stated that the importance of the financial service sector to the economy means that it cannot be put on auto-pilot and therefore, there must be deliberate and intentional interventions to ensure it remains healthy and relevant, cautioning the union not to compromise on the need to uphold best practices when it comes to corporate governance, as well as to be quick on compliance as it is germane to success as a financial institution.
In addition, he assured CUA management that SEC will ensure that the 50 percent of locked up funds with SEC regulated firms will be payed within the shortest possible time to bring relief to the cooperatives whilst the other 50 percent is paid in bonds and investments.
General Manager, CUA, Emmanuel Coffie, indicated that because members of the unions have been impacted heavily, credit mobilization was affected initially, however, businesses are picking up and credit unions are bouncing back strongly and are on course to meeting targets of full operation.
“We are able to exist as credit unions because we have been able to create funds for ourselves called Central Finance Facility (CFF), so when members were having liquidity challenges and difficulties, we assisted them with that initiative so going forward we will put more funds into that reservoir to mitigate unforeseen challenges in the future,” he said.