Bank of Ghana to check abuses in rural banks
Bank of Ghana sets up pool of managers for rural banks
Only 24 per cent of credit assistance fund disbursed
Local investors told to lead private investment in Africa
Market index makes slight gain under negative pressure
Bank of Ghana to check abuses in rural banks
Awutu-Bawjiase (Central Region) 5th July '99
The Bank of Ghana (BOG) has adopted stringent measures to check abuses in the rural banking system, to make it more vibrant, efficient and reliable.
As part of the measures, a new rural bank will attract an initial working capital of 100 million cedis, while the existing ones are required to raise their capital levels to a minimum of 30 million cedis.
In addition, rural banks wishing to open new agencies should seek prior approval from the BOG.
They are also required to employ high calibre personnel who can monitor and supervise the activities of the agencies.
Such personnel would also be expected to demonstrate the ability to meet prudential requirements, and obtain local equity participation in the agencies.
Mr E.D. Asiedu-Mante, head of the banking supervision department of the central bank announced these in a speech read for him at the ninth annual shareholders meeting of the Awutu-Bawjiase area rural bank at Bawjiase at the weekend.
He said the adoption of the tough measures had become necessary in view of the varying levels of capital deficiency recorded by many rural banks.
The central bank would maintain the original principal of community ownership of rural banks by ensuring that no single individual, group or company is allowed to subscribe to absolute majority shares.
In this regard, the BOG has prescribed maximum equity ownership of 10 per cent for individuals and 30 per cent for corporate bodies.
Mr Asiedu-Mante said since the success of the rural banking concept depended largely on the ability and calibre of directors and management, the central bank had specified qualifying requirements for prospective rural bank directors.
Prospective rural and community bank directors need to possess a minimum basic educational qualification, professional experience or special expertise.
It is also expected that at least one of the directors must be an experienced banker with knowledge on current issues affecting the industry.
He said this would ensure the ability of rural bank board members to understand and interpret financial statements, as well as make operational, internal and supervisory policies.
The central bank, he added, is still committed to the development and growth of rural and community banks, as an integral part of the banking system in the country.
Mr Asiedu-Mante gave the assurance that the BOG would continue to support the association of rural banks, in the organisation of training programmes for staff and directors.
"We hope that these workshops and seminars would enable rural banks to operate in a prudent manner by ensuring that adequate accounting and internal control systems exist".
Mr Asiedu-Mante mentioned embezzlement, short landing of foreign credit facilities, suppression of cheques and unauthorised credits, among others, as some banking practices which militate against the smooth operations of the rural banks.
He announced that the BOG has instituted specific spot sanctions against board members and staff found involved in such practices, and called for the co-operation of board members in enforcing the sanctions.
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Bank of Ghana sets up pool of managers for rural banks
Awutu Bawjiase (Central Region) 5th July '99
The Banking Supervision Department of the Bank of Ghana (BOG), has set up a pool of managers in support of its measures aimed at making rural banks efficient and useful to the rural people.
The measure will enable rural bank managers to take their annual leave to save themselves from the temptation of indulging in fraudulent deals.
Mr E.D. Asiedu Mante, head of the department said this in a speech read for him at the ninth annual shareholders meeting of the Awutu-Bawjiase area rural bank at Bawjiase last Friday.
He attributed several cases of fraud associated with the operations of most rural banks to managers who have remained at post for many years without proceeding on leave.
"It is believed that if managers of rural banks are made to regularly take their annual leave, the perpetration of fraud will be minimised if not eliminated", Mr Asiedu Mante said.
He expressed satisfaction with the co-operation and support that his department had so far received from the association of rural banks, and boards of directors of rural banks.
Mr E.A. Obeng, assistant national secretary of the association of rural banks and Nana Obaatan Otoo, president of the Central region branch of the association, expressed their appreciation for the support the Bank of Ghana offers to the association.
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Only 24 per cent of credit assistance fund disbursed
Kumasi (Ashanti Region) 5th July '99
Only 5.9 million dollars out of the 24.9 million dollars of the Non-Bank Financial Institutions (NBFI) Credit Assistance Project fund has been disbursed or committed since its establishment in August 1996.
This represents about 24 per cent of the amount.
According to Dr K.A. Salami, the Project Manager, the Ministry of Finance as a result, is contemplating either to re-allocate the remaining 19 million dollars among beneficiaries, taking into consideration budgets they submitted.
The Ministry is also considering extending the project completion date of June next year to a more realistic time.
Dr Salami was speaking at the opening of a four-day Africa Regional Conference of Opportunity International Network (OIN) in Kumasi on Friday.
The conference organised by the Ghanaian affiliate of the network, Sinapi Aba Trust, a small micro credit development agency, is being attended by 40 participants from Malawi, Zimbabwe, USA and France.
It is under the theme "Living our calling in a changing world".
Dr Salami explained that the project was established to enable the target institutions to get financial assistance in the form of loans and grants provided by the International Development Agency (IDA) of the World Bank.
Under the project, the selected financial institutions would be helped to become more efficient as part of efforts to improve the overall performance of the country's financial system.
It was hoped that through these efforts more savings would be made to form the basis for private and public sector investment.
Dr Salami said at the inception of the project, about 3.75 million dollars was set aside for micro/rural finance which shows government commitment to help the rural poor.
Dr David O. Andah, Director of NBFI of the Bank of Ghana, said the banking law is under review adding that the operational guidelines for non-bank financial institutions have been reviewed.
He said to enable NGOs in the micro finance sector to encourage the habit of saving among their customers and to accumulate funds, they should register as corporate bodies and to seek license to operate as savings and loans companies.
Dr Andah explained that unless NGOs upgrade their status to that of savings and loans companies, they couldn't rely on savings as a means of weaning themselves from donor funds, which is the main support for their operations.
Mr Kojo Yankah, Ashanti Regional Minister said attempts by government to assist distressed enterprises with the Business Assistance Fund (BAF) have not been very successful because of the refusal of some beneficiaries to repay the loans.
He appealed to enterprises, groups and individuals to be sincere to ensure the sustainability of the Sinapi Aba Trust.
Mr Kwabena Darko, chairman of the board of OIN, said the Network is a global Christian organisation mainly involved in granting small credits to operators of small and micro enterprises in developing countries.
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Local investors told to lead private investment in Africa
Accra (Greater Accra), 5th July 99 –
Private sector investment, fuelled by local investors, remains the single largest investment potential for Africa if the benefits of the support from international agencies is to be sustained.
By this, confidence is built in the minds of foreign investors who see the success of local businessmen in national economies as an example of what they can do.
Mr. Robert Calderisi, External Affairs Manager, Africa Region of the World Bank, told members of the Institute of Financial and Economic Journalists (IFEJ) in Accra on Friday.
"When local investors invest in Africa, then, others will take note," Mr. Calderisi, who is in the country to acquaint himself with operations of the bank in Africa and find ways to further strengthen it, said.
He said the bank's objective currently is to reduce Africa's dependence on aid instead of depending on it, adding that African investors should be made to become ambassadors of investment.
Mr. Calderisi said another challenge facing Africa today is to restoration of the reputation of their governments, adding that government’s need to be in ‘good standing’ attract funding from the bank.
"It should not be forgotten that the World Bank is a creation of governments and lends to governments. It will be suicidal to think that development can take place without governments.
"What the bank is doing is to help attract back the talents that have deserted the countries on the continent, get children back to school in places where enrolment records are less than 50 per cent".
He said the responsibility of eradicating the dreaded AIDS disease, which has posed serious problems in the last 15 years and is now a development crisis for Africa, is also attracting the bank's attention.
Mr. Calderisi said: "For Africa, AIDS is reversing 40 years of hard won social progress. Until we find an end to it, it will continue to reverse all the gains chalked in the past."
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Market index makes slight gain under negative pressure
Accra (Greater Accra), 5th July 99 –
The Ghana Stock Exchange (GSE) All-Share Index on Friday managed a 0.48 points gain, despite negative pressure on some of the equities.
The All-Share Index thus maintained its upward stance as a result of a 40-cedi gain in the share price of the SSB Bank (SSB).
The index gained 10.36 points and 7.59 points on Monday and Wednesday respectively, after weeks of continuous decline due to drops in prices of major equities.
The change in the year to date was negative 7.11 per cent.
Market volumes, however, declined by huge margins with the total shares traded closing the week at 24,000, down from Wednesday's 260,200 Shares on demand finished at 256,800, compared to the previous demand of 750,900.
Offers closed the week at 2.7 million shares, down from three million shares. Market capitalisation was up from 3,308.52 billion cedis to 3,309.19 billion cedis.
In the broader market, there were six price changes - one up and five down.
SSB gained 40 cedis at 1,950 cedis. Aluworks Company Limited (ALW) lost 100 cedis to close the day 2,600 cedis, while CFAO and Super Paper Products Company (SPPC) lost five cedis and 20 cedis to finish trading at 40 cedis and 210 cedis respectively.
Metaloplastica Ghana Limited (MLG) lost five cedis at 220, and Ghana Breweries Limited (GBL) finished trading at 1,879 cedis, losing by one cedi.
The following are the last prices of listed equities in cedis:
ABL 600
AGC 18,700
ALW 2,600 -100
BAT 380
CFAO 40 -45
EIC 1,990
FML 1,250
GBL 1,879 -1
GCB 1,000
GGL 925
HFC 750
MGL 220 -5
MLC 200
MOGL 16,800
PAF 295
PZ 850
SCB 22,000
SPPC 210 -20
SSB 1,950 +40
UNIL 1,730
UTC-E 125
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