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Non-Bank Financial Institutions (NFIs) must institute robust systems and procedures to ensure the sustainability of the industry, Second Deputy Governor of Bank of Ghana (BoG), Mrs Elsie Awadzi Addo, has stressed.
"There is a widely held perception that the microfinance sector has to be made up of small institutions with watered down systems and procedures. This view has resulted in some players often settling for less robust systems and procedures," she said at the maiden NFIs Awards and Dinner Night organised by the Ghana Microfinance Institutions Network (GHAMFIN) in Accra on Thursday.
She said "while there may be short-term economic justifications for this, in the long run it leads to weak corporate control systems and operational inefficiencies which is more costly and undermine sustainability,"
Supported by MTN, Bankingly, StarMicro and Starlife, the programme was on the theme "Enhancing Non-Bank Excellence and Credibility during Disruptive Periods."
In all, 60 organisations comprising savings and loans, rural and community banks, microfinance companies, credit unions, micro credit companies, financial non-governmental organisations, susu enterprises were awarded for their exceptional performance and also special awards were given to organisations that contributed to the development of the industry.
The Second Deputy Governor in the keynote address delivered on her behalf by Mrs Patience Yeboah-Nkansah from the Other Financial Institutions Supervision Department of the BoG, said microfinance institutions could be strong and efficient institutions.
"It is even possible for even small institutions to be better controlled, better organised and efficiently managed with the right corporate governance and risk management practices, adequate capital and responsible pursuit of growth," MrsAddo said.
MrsAddo said the BoG and the Ministry of Finance and the World Bank had been conducting diagnosis study to help position the sector to better contribute to financial inclusion and growth of the economy.
The Second Deputy Governor commended GHAMFIN for organising the award to promote excellence in the sector and urged the organisation to step up its supervisory role to ensure compliance of its dictates.
The Head of Banking and Non-Banking Unit Financial Sector Division of the Ministry of Finance, Andrew KudzoAmeckson, in his address pledged government's commitment to help the NFI sector to thrive... Read more on All Africa
Source: All Africa