MASLOC to become independent of government

The Microfinance and Small Loans Company, MASLOC says it remains determined to wean itself off government support in the near future.

Government at the moment remains the sole-financier, but it says increasing demand from the public requires that it increases its loan purse.

Officials say plans to recapitalize and gain autonomy are currently before cabinet for approval.

Public Relations Officer, Mustapha Abubakar says one of the options is to source funds from the international market.

He said it is particularly important for MASLOC to try and stand on its own because the default rate of its beneficiaries was high because people tended to think that the money is government money.

Mustapha Abubaker said MASLOC is also working on extending loan facilities to public sector workers.



Source: Joy Business/Ghana

Book Review

Ghana-Microfinance.com is proud to present to you a review on the first ever text and reference book on rural banking practice in Ghana.

The book, titled: Rural Banking in Ghana, is authored by a former Deputy Governor of the Bank of Ghana, Mr. Asiedu Mante and seeks to provide guidance to bankers (both under training and practicing) and also serve as a reference on rural banking in Ghana.

In all the book consist of 15 chapters.

Chapters one to three of the book discusses the reasons for the establishment of rural banks, the architects, the role of the Central Bank, the management structure of rural banks and the evolution of rural banks.

Chapters four to 10 detailed the financial intermediation roles, credit management practices and challenges, security and operational issues, internal controls, prudent supervision and causes of distress in rural banks.

Mr Asiedu-Mante devotes the 11th chapter of the book to insurance in rural banking, though some of the details found in other chapters could be very useful to academics, practitioners and students of banking, finance and insurance. It simply shows the way the concepts have been defined and analysed.

Chapter 12 focuses on international assistance to the rural banks, chapter 13 touched on issues relating to the ARB/Apex Bank and the rationale for it establishment, functions and the expected roles to complement earlier analysis on the rationale, justification and relevance of the Association of Rural Banks and the desired complementary roles the two institutions should play in the effective development and functioning of rural banks in Ghana.

Chapter 14 opens up the canker on the avid subject of agriculture financing, which is perceived as risky, yet the very nerve of the country’s economic emancipation.

The last chapter proffers ideas on the future of rural banking.

Where To Buy

Contact us on 0289554043

Angel Fund from Venture Capital Trust to take off next month

Business start-ups will from next month be able to attract ready capital in return for ceding ownership of their businesses.

The Angel Fund, an initiative of the Venture Capital Trust Fund is making the arrangement possible.

The fund will also provide technical assistance to such entrepreneurs.

Managers of the fund are currently agreeing terms for investors willing to commit their resources for a successful take-off.

Investment Officer at Venture Capital Trust Fund, Anthony Siaw told Joy Business entrepreneurs will be given the opportunity to convince managers of the fund that they have the best deal.



Source: Joy Business/Ghana

SEC to license financial journalists who advise for profit

The Securities and Exchange Commission has indicated that financial journalists who advise for profit will soon have to be licensed before they can operate.

According to the SEC, the directive aims to bring the industry laws in line with international best practices.

It will also ensure that those who give investment advice are also licensed.

One of the architects of the securities law, Adu Anane Antwi told Joy Business the rationale for the directive is founded on the grounds that the advice of journalists can determine where investors put their money and journalists must not be allowed to offer such critical service if they have not been certified to do so.

The Securities Industry bill is currently before the Attorney General’s Office for scrutiny to ensure it is not in conflict with the country’s laws.

It will then be forwarded to Cabinet for consideration before being presented to parliament.



Source: Joy Business/Ghana

Awutu-Emasa Rural bank declares profit

The Awutu-Emasa Rural Bank Limited at Awutu Bereku in the Awutu-Senya District of the Central Region declared a net profit of GH¢157,332 in 2010 as against GH¢124,347 in 2009.

The bank total assets also increased from GH¢3,755,238 in 2009 to GH¢4,709,510 in 2010.

Mr Acquah-Arhin, Chairman of the Board of Directors of the Bank, made this known at the 22nd Annual General Meeting of the shareholders at Awutu Bereku.

He said total loans and advances granted to customers of the bank increased from GH¢1,837,852 in 2009 to GH¢2,554, 763 in 2010.

According to him the money went into agriculture, education, the transport sector and other businesses.

Mr Eric Osei-Bonsu, managing director of the ARB Apex bank, in an address, commended the management of the bank for the satisfactory performance.

According to him, the operations of 34 rural banks with 233 branches and agencies have so far been automated under the ARB Apex Bank computerization program.

He said “all the banks are running on the latest version of the emerge software known as T24 to argument the operations of rural banking".

The MD said rural and community banks therefore log unto a central database system which would be hosted at the ARB Apex bank head office in Accra through a wide area network.

He noted that the Apex link Money transfer which is a domestic transfer of funds through the Rural and Community Banks and ARB Apex Bank branches has come to fill a huge void in the National Payment System.


Source: GNA

Banks snub small enterprises

Contrary to the view that the private sector - and more especially Small and Medium Enterprises (SMEs) - propels the economic growth of developing countries, most of these SMEs in the country are being denied access to loans by a considerable number of commercial banks for lack of adequate bookkeeping.

“How can we develop this country collectively - when those who are supposed to facilitate the take-off of the economy apply complex and prohibitive lending procedures to refuse loans to these SMEs on the grounds that they lack basic bookkeeping to enable them qualify for loans?” Nana Dwomo Sarpong, an Accra business executive, queried.

Nana Sarpong, who is also an ardent advocate on environmental issues, drew a parallel to this delicate issue with developed economies, explaining that in advanced countries like the US and others, SMEs can easily access the services of chartered accountants to prepare their bookkeeping to enable them become credible to the banks.

He said in Ghana those SMEs which could not convince their banks for loans are requested to provide collateral, especially immovable assets worth millions of cedis. He asked: “How can these people provide this collateral to enable them access loans?” The result is that these SMEs, which are the solution to the intractable unemployment problem facing the country, will continue to remain in the state they find themselves.

Nana Sarpong disclosed that some banks in the country promote their banks with perceived low base rates - e.g. 22%. Unknowingly, people see it as a good rate for loan; but the fact is that these banks hide a facility fee of 0.5%-1% and borrowing fee of 4% among others, which raises the base rate to about 27-28% and the borrower has to contend it with during the period of repayment. He urged the banks to factor all these fees into their base rates for the public to decide which bank offers the best rates.

Nana Sarpong also accused some banks in the country of making huge profit out of indirect borrowing from their clients’ deposits at their expense. He said what the country needs now is continuous improvement by the SMEs for the economy to grow.


Source: By Kwame Mensah/B&FT/Ghana

Banks Urged To Assist SMEs To Grow

Financial institutions operating in the country have been called upon to assist Small and Medium Scale enterprises to build solid businesses based on sound ethics and good business practices.

Mr. Charles Sirois, Founder of Enablis Entrepreneurial Network who made the call during interactions with the management team of UT Bank, said: “The development of any nation is based on how well grounded its SME base is, and this can only be achieved through a stable political environment which Ghana already has.”

Mr. Sirois said Ghana has what it takes to develop the SME sector to fuel domestic growth, adding that “I have a lot of hope for the markets in Africa because I know the world needs Africa and Africa will definitely take its place in the world’s economy, but that will depend on how well we build the SME sector.”

He said there are two Africa’s “the Africa on its knees and the Africa on its feet , and Ghana is definitely on its feet; all that is required now is a solid entrepreneurial base to deliver quality life to its people.”

Mr. Sirois commended UT Bank for taking up the bold initiative and “catching the dream of developing SMEs to take their rightful place in the social and economic development of the nation.” He was full of praise for Mr. Prince Amoabeng, CEO of UT Bank, for his personal commitment to the UT dream and his entrepreneurial prowess.

For his part, Mr. Amoabeng thanked Mr. Sirois for his visit and said: “It was not difficult for us to partner ENABLIS because we believe we have a common goal, so this is a natural alliance.” He pledged the continuous commitment of the UT Group to the development of the SME sector. “ Having been one ourselves, we appreciate the peculiar challenges they face and we have what it takes to offer solutions.”

The two organisations later signed a memorandum of understanding to seal the partnership. Last year, UT Bank partnered Enablis Ghana with a grant of GH¢100,000 for its business launchpad competition - from which ten up-and-coming entrepreneurs are being assisted to build their businesses.

Enablis is a membership-based organisation that believes the entrepreneur is key to successful SME business. The organisation supports members to be successful business owners by sharpening their personal skills, problem-solving capacity, creativity, integrity, and business acumen.

The global non-profit organisation began operations in Ghana in October 2009, and currently has over 130 members. The members benefit from regular training based on a unique plan for each member designed to take them to the next level. It has also designed unique funding vehicles exclusively for its members which focus on filing the financing gap that confronts entrepreneurs.

Source B&FT