Audio By Carbonatix
Cooperative Credit Unions in the country are to operate under a separate regime in the Central Bank’s ongoing reform of the microfinance industry.
Guidelines on the new regulated microfinance regime, under the Non-bank Financial Institutions Act 2008, placed Credit Unions under the second tier, together with Susu Companies taking deposits and making profits.
Licensing of operators under the four-tier system is expected to take effect by next quarter but Credit Unions are yet to roped in the regulated activities.
Director of Banking Supervision Department of the Bank of Ghana, Franklin Belnye told Luv Biz Report regulation of the unions would commerce as soon as parliament passes a legislative instrument for the sector.
“The framework has been completed at the Bank of Ghana and been forwarded to the Ministry of Finance who have to liaise with the Attorney-General’s Department and lay it before parliament. So when that has been done and the LI is passed then their regime of supervision will kick start”, he said.
Cooperative credit unions feel threatened by activities of other microfinance companies in competition for clients.
The Unions have called for the speedy passage of the Credit Union Bill to enable them retain and grow members, who are increasingly shifting to other financial service providers.
The low interest rates and drive for the culture of savings are factors that place credit unions in better position to compete with other financial institutions.
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