Universal Banks in the country have been challenged to take advantage of the ongoing clean-up exercises in the non-bank financial sectors such as the Microfinance sector to extend their services to the micro level.
According to the Managing Director of Access Bank Olumide Olatunji, the recent reforms by the Bank of Ghana can be viewed as an opportunity by the 23 universal banks in the country.
After securing about GHS1 billion to clean-up the microfinance sector, the central bank has indicated that it will soon move to the Savings and Loans sector after it is able to secure the over GHC 7 billion needed to clean-up that sector.
Commenting on the ongoing reforms in an interview with Citi Business News, Mr. Olatunji said banks can support the drive for financial inclusion is they develop products that cater to the informal sector of the economy.
“Every sector of the financial system has its role. But I think the ongoing clean-up creates opportunities for the commercial banks. The sanity around the commercial banks has been cleared, so if we extend ourselves well we’ll see opportunity down the value chain where the sector still needs to be cleared. So, the commercial banks need to go down into the retail space and get their hands dirty and do the real business of micro-lending,” he said.
The central bank’s recent financial sector clean-up saw it revoking the licenses of 347 microfinance institutions and 39 microcredit institutions.
Of the 347 microfinance institutions whose licenses were revoked, 192 of them were insolvent while the remaining 155 had ceased operations. That exercise now leaves the microfinance space with 137 active microfinance companies in the country.
The BoG subsequently appointed Eric Nipah as Receiver for the specified microfinance institutions, also in line with section 123 (2) of Act 930.