World Bank Country Director, Mr Ishac Diwan has called for the collective efforts of bankers, financial market participants, regulators, central bankers and government officials, to enable Ghana become a dynamic financial centre and a regional hub within the sub region. Speaking on the theme: "Aggressive Financial Intermediation for Rapid Socio-economic Growth and Development," at the launch of the 2009 Ghana Banking Awards, Mr Diwan said "So far, we have seen improvements in the core business of banking. The banking sector was estimated to account for about 70.1 per cent of total financial system assets followed by Ghana's pension fund, SSNIT, with roughly 16.3 per cent and the insurance sector with about two per cent". He said the remaining 12 per cent are in the areas of finance companies, leasing, savings and loans, venture capital, credit unions and community banks. The banking awards which has been accepted as the most prestigious, transparent and accountable awards in the country is organised by Corporate Initiative Ghana (CIG) among others, to increase competition and quality of banking in the country while ensuring excellence in service delivery. "Capital markets, though still small, increased to 35 listed equities with a market capitalisation of around 90 per cent of GDP. Debt markets are now estimated at 26 per cent of GDP, consisting most of government securities," Mr Diwan said and added that; "Overall, the bond market has not taken off, the mortgage market remains timid and there are no commodities market, the insurance market is still in its infancy and the same for the stock exchange." Mr Diwan said Ghana had witnessed some growth in venture capital, but there was a lot of work to be done to ensure its growth and development. He also mentioned the pension reform which he said continues to be one of the most important reforms that has taken place within the financial sector and expressed the hope that it would provide long term funding which was crucial for most of the business lines with great potential. The Country Director described the transformation of the banking sector in Ghana over the last 10 years as a remarkable story. He stated that the number of banks has grown from 16 to 26, while the number of branches has equally grown fast, pointing out that private sector credit has grown from about 12 per cent of GDP to about 30 per cent of GDP. He said Ghana now has a banking sector which was of a comparable order of magnitude to that of Nigeria or Kenya. Mr Diwan said the Financial Sector Reform process, initiated 10 years ago, has continued to perform well, despite the continued strains in the international financial system and the challenges presented in the past few years by the substantial twin deficits. “The effects of the global financial crisis have been relatively limited. The banking sector continues to be profitable and liquid with capital adequacy ratios in excess of the statutory minimum”, he said, adding that, "This relative resilience reflects the interplay of several factors, including the resilience of the growth process, the limited exposure of domestic institutions to global financial markets, reliance on domestic deposits for funding, and the good supervision by the Bank of Ghana (BOG) that require commercial banks to build up capital and enabled early intervention in troubled banks." The Executive Secretary of the CIG, Mr Afotey Odarteifio, said the Ghana Banking Awards 2008 survey report indicated that "we still have some weaknesses in proximity and accessibility of banks". “From our research, proximity and acceptability of banks appear to be the most significant factor influencing decisions by customers to open bank accounts with their respective banks", he said. Mr Odarteifio said the issue had been prevalent for the past four years and thus gives the banks an opportunity to expand in terms of increased number of branches to address the issue of proximity and accessibility. On Information Technology, (IT) and electronic banking, he said the research revealed that an average of 41 per cent of corporate customers and 52 per cent of retail customers use the electronic banking services provided by their banks. Mr Odarteifio said the initiative of CIG to stimulate competition within the banking industry goes a long way to emphasise the building and restructuring of a good economy. He pledged the commitment of CIG to once again, deliver one of the best award ceremonies for one of the most important sectors of the economy. Source: Graphic Business