Clean-up with the debris left behind

It has always been said that cleanliness is next to godliness, and so in our efforts to live by this saying we clean our homes, town and cities as much as we can. Indeed, we sweep the streets, desilt the drains – but often fail to collect the debris from the shoulders of the roads.

This not only takes the shine off such exercises, but also allows the wind or next rain to move the silt, waste polythene material (sachet water bags, bottles etc.) all together back into the drains. Mosquitos find safe havens in those drains, breed in large numbers and spare no one from their bites. Then you ask yourself if such exercises are worth the time and all the resources committed with the intention of making the environment clean.

The rainy season is here with us, and again we have listened to the news or watched the rain cause havoc to lives and property in many places – especially the capital, Accra. I recently watched a video circulating on WhatsApp involving a gentleman caught in the rain with his bedroom inundated with the spillover. His room could have been spared if the drains near his residence allowed easy flow of water, but the result of the debris denied him comfort.

There are many other people who have experienced worse situations, and I guess you have also witnessed some or fallen victim to them. Either way, we are collectively and invariably affected by such sweeping upheavals to many other people, near or far. Thus, the call has been to plan such clean-up activities and ensure we execute them in every aspect as desirable. That said, in the last two years another important part of our society taken by a storm of great magnitude is the financial services sector – the banking segment being the main focus of attention with the catch-phrase clean-up.

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It has been a breathtaking experience to witness the clean-up of nine (9) universal banks and three hundred and forty-seven (347) microfinance institutions, entirely due to regulatory infractions. The Securities and Exchange Commission (SEC) on its part, a couple of weeks ago also revoked the licences of some five (5) investment firms for various offences. Will the National Pensions Regulatory Authority (NPRA) and the National Insurance Commission (NIC) also undertake similar exercises? Time will tell, and we hope companies operating under their supervision are solvent and compliant with other regulations.

Mixed blessings

Since the end of the clean-up exercise within the mainstream banking space, confidence has begun to shore-up with the surge in deposits. This, in fact, is good news for the sector. In the coming days, we expect the same rebound of confidence in the microfinance companies currently in good standing. But such an expectation cannot be held for the savings and loans companies and the finance houses – for now. At the moment the public is very wary, mistrusting to do business with many if not all of them due to the unavailability of funds (GH¢7billion) to clean-up the insolvent ones among them.

By extension, from now till the funds are mobilised to undertake the last lap of the clean-up exercise, the public is faced with the issue of how to distinguish a savings and loans company or finance house in good standing, as known to the regulator, from others equally in operation but are to lose their licences. At least, it is a matter of public knowledge that some savings and loans companies including Alpha Capital, ASN Financial Services, Accent Financial Services are insolvent and have ceased operations.

Also, the public has witnessed an open expression of frustration by some aggrieved customers against some other savings and loans companies. Hence, many have already lost confidence in doing business with those distressed companies unable to pay their depositors’ investments on demand. With a mixed bag of good and bad companies, managers of the good ones will have to develop strong strategies with a sense of urgency to manage panic-withdrawals within the waiting period.

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The recent statement from managers of the state-owned GCB Bank with many resources and a strong reputation is worth reflecting on again. It is the statement to the effect that the bank witnessed a dip in customer-deposits of about GH¢1bn, mainly due to panic-withdrawals just after purchase and acquisition of the defunct UT Bank and Capital Bank.

Based on this, we can then imagine the strain and stress management of the savings and loans companies and the finance houses with little financial resources will have to endure till the dust finally settles. In the GCB Bank experience, it received liquidity support of GH¢400million from the central bank to contain the situation. This opportunity is far from the reality of savings and loans companies and finance houses.

So, the unavailability of funds to finish-up with the insolvent non-bank financial institutions has left behind the debris of their failures and misdemeanors around us. Such debris is being swept by the ravaging wind of uncertainty into the banking halls of the stable ones, and we can foresee the consequences.

What do you say? Thank you for reading. Let’s keep the discussion going. Your feedback is welcome. God Bless You.

This script was written by a Chartered Banker with a flair for feature writing. Apart from his work schedules, he edits or proof-reads corporate material for his colleagues, executive managers – including distinguished professionals working in various fields outside Banking. Through this column, his articles feature on third-party online media platforms in Ghana and outside. Email:

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