The leadership of the Ghana Co-operative Credit Unions Association (CUA) has appealed to President Akufo-Addo’s administration to take urgent steps to have their lock-up funds released to their struggling members.
The funds were locked up following the comprehensive banking and financial sector clean-up.
According to CUA, its members have GH¢180,806,890.60 locked-up in 31 financial institutions.
Twenty-one of these institutions, which are now defunct have a total of GH¢130,388,516.62 with the remaining 10 existing financial institutions holding a total of GH¢50,418,373.98.
Disclosing these to President Akufo-Addo at the Jubilee House on Monday, when they paid a courtesy call on him, President and Chairman of the CUA board, Dr. Bernard Bingab, said while the CUA recognises the intervention of government as a result of the financial sector clean-up, members of the CUA are struggling because a significant part of their investment funds are locked-up.
He decried that coupled with the effects of the novel corona virus, COVID-19, the CUA sought for support from the Ghana Enterprises Agency (GEA) in the government’s COVID-19 alleviation fund, but has not received any positive feedback till date.
“For this reason, the board of CUA wants to appeal to his excellency the President to support the credit union through CUA to address the challenge faced by the unions in this trying moment” Dr. Bernard Bingab pleaded.
Legal regime
Dr. Bernard Bingab noted that the Credit Unions legislative instruction, LI 2225 (2015) is to allow the credit union movement to continue to play the role it has always played in the economy.
However, this can only be done from a position of greater strength, safety and soundness.
The legislation among others things the CUA board Chairman said, “will encourage greater prudence in the management of loans granted by the credit unions; ensure adequate capital; provide greater guidelines for investment activities of credit unions; and ensure more effective corporate governance system”.
“Unfortunately, the LI 2225 since its passage in 2015 has not been operationalised. Several efforts have been made by CUA in engaging the relevant state institutions on operationalizing the Law”.
Dr. Bingab added that, “Except to say that quite recently, the Honourable Minister for Finance has in principle accepted that CUs need to be regulated, because regulation is the function of the State. We therefore seek the kind intervention of the high office of the President of the Republic of Ghana towards regulating CUs in Ghana as done in sister countries, like, The Gambia and Kenya.
“We also notice that there exists a couple of laws that govern regulation of Credit Unions, the Co-operative Degree, Bank of Ghana Act and the non-Banking Financial Act. These laws are Multi-Sectoral and therefore needs to be harmonized to make regulation more smooth”.
Akufo-Addo’s Response
In his response, President Akufo-Addo said he agrees with the suggestion that there is the need to harmonise all the laws found in the Co-operative Degree, Bank of Ghana Act and the non-Banking Financial Act into a single law that will regulate the credit union sector.
On the locked-up funds, the President relied on available data on the ongoing liquidation process of the financial institutions in question and assured the CUA that their funds will be released to them as soon as possible.
The CUA
CUA is the umbrella body of all Co-operative Credit Unions in Ghana.
It provides an enabling environment for financial and other technical services to reach its members and also ensuring that the Credit Union concept is promoted properly.
CUA exists to regulate and supervise all Credit Unions in the country on behalf of the Bank of Ghana and other interested groups for sanity to prevail in the market.
The CUA is a member of the Ghana Microfinance Institutions Network (GHAMFIN).
The CUA co-operates with the Department of Co-operatives of the Ministry of Employment and Social Welfare and the Ghana C-operative Council.
