By Kingsley Webora TANKEH
The 26 savings and loans companies operating under the Ghana Association of Savings and Loans Companies (GHASALC), have experienced explosive growth, with total assets reaching GH¢10.2 billion, as of March 2025, representing a 30 percent year-on-year growth.
Despite the fact that the Capital Adequacy Ratio (CAR) of these institutions declined to 1.5 percent – well below the 10 percent threshold – compared to the 1.9 percent recorded at the end of December 2022, the Non-Performing Loans (NPL) ratio has improved to 15 percent at end of March 2025. The ratio was down from the 18 percent recorded at the end of December 2022.
Speaking at the 15th Annual General Meeting (AGM) of GHASALC, the CEO, Tweneboah Kodua Boakye, highlighted the sector’s increasing financial muscle. “The sector grew drastically year-on-year in assets. As we speak now, the asset has surpassed GH¢10 billion in capacity.” The sector’s assets surged by a remarkable 30.6 percent year-on-year, in the 2024 financial year, reaching GH¢9.6 billion, from the GH¢7.3 billion recorded in 2023.
Mr. Boakye also indicated that sector players now operate both physical branches or digital touchpoints in all the 16 regions, serving over 5 million customers and employ “the service of 6,000 people directly,” signifying significant job creation.
In 2024 alone, member institutions granted 12.32 million individual loans, valued at GH¢10.66 billion. This volume underscores the sector’s focus on serving high-volume, short-term, smaller-value financing needs – the lifeblood of MSMEs and individuals often overlooked by traditional banks.
In Ghana, MSMEs contribute nearly 70 percent of GDP and employs 80 percent of the entire workforce. However, many of these businesses struggle to access the needed capital and support for economic growth. The industry’s financial health paints a picture of a rapidly expanding financial force, underscoring the critical role savings and loans companies play in financing micro, small, and medium enterprises (MSMEs).
Mr. Boakye stressed that, “By empowering MSMEs, we are not only driving economic growth—we are building a more inclusive, resilient, and equitable society.”
Hence, the theme for the 15th Annual General Meeting of the Ghana Association of Savings and Loans Companies: ‘Empowering MSMEs for Inclusive Growth’.
Name change suggestion
However, despite the sector’s impressive growth, which Boakye described as “strong,” with members “operating on a solid basis,” he made a powerful critique of the sector’s very name. He argued that ‘Savings and Loans’ is a mere product description and that it fails to capture the sector’s true state as a vital second-tier banking institution.
While presenting the staggering industry financial performance at the AGM, he made a clarion call for a fundamental change in the industry’s nomenclature to reflect its true scale and strategic importance. “The sector deserves to be recognized with an appropriate name. Not as a credit union. Neither as a VSLA. But an industry that plays a key role.”
He maintained that, this identity crisis, hinders recognition and respect. “The savings and loans sector occupies a very unique strategic position between the mainstream commercial banking and the lower-tier institutions… we are a second-tier banking institution,” he added.
Industry association performance
GHASALC itself has also demonstrated robust financial health. The Board Chairman of GHASALC, Fred Safo-Kantanka reported that, “the association ended the year with all 26 licensed savings and loans companies as members and improved our net assets from GH¢417,648 to GH¢627,677, with a surplus of GH¢149,029.”
Mr. Boakye announced a partnership with the Mohaloop Foundation for an “inclusive instant payment system,” aiming to drastically reduce transaction costs and enable seamless interoperability between institutions. “We want our customers, the MSME, to do business among us seamlessly,” he stated, citing successful models in Kenya and Rwanda.
Chairman Safo-Kantanka framed the sector’s mission as pivotal to national development. “MSMEs remain pivotal to economic development, contributing significantly to GDP, job creation and serving as engines of innovation and community growth.”
However, he acknowledged persistent challenges in MSME access to finance but stressed the sector’s commitment to bridging the gap through tailored products, financial literacy, and digital channels. “As GHASALC, we remain steadfast in our vision to serve as a catalyst for inclusive development… Let us remember, every thriving MSME is a step towards economic freedom, human dignity and shared growth.”
The sector’s financial performance proves it is delivering. It now seeks an identity that matches its stature and ambition on the national stage.
