Credit unions in the country are to be licensed to ensure discipline and effectiveness in their operations.
The initiative will also guarantee transparency and restore trust and confidence in their performance.
The General Manager of Credit Unions Association (CUA), Mr Solomon Owusu Nyarko, announced this at the 9th Microfinance conference in Cape Coast.
It was on the theme: “The future of microfinance: Sustainability of microfinance institutions and financial inclusion.”
Approach
Mr Nyarko said the lack of business approach in credit union management was unhealthy for the development of the sector and indicated that licensing the unions would improve their governance and development.
As of December 31, 2016, there were 536 credit unions in the country with a total membership of 895,330 and a youth savings club of 90,411.
Total deposits mobilised stood at about GH¢786,747,000 while about GH¢516,452,000 was disbursed as loans within the same period.
He said the asset base of the credit unions in the country also stood at more than GH¢1 trillion.
“The performance of the credit union system in Ghana is indeed a clear demonstration to the government and to all interested parties that if only 895,330 of the population can mobilise over GH¢789 billion in deposit, the system could achieve more if our membership could increase to two million,” Mr Nyarko said.
Concerns
He expressed concern about the activities of illegal microfinance institutions in the country that were fleecing their customers and appealed to the government to step in and regulate the operations of such companies.
The Executive Director of the Ghana Microfinance Institutions Network (GHAMFIN), Mr Yaw Gyamfi, said despite their challenges, microfinance institutions had contributed significantly in providing financial services to the poor and vulnerable who would normally have been rejected by commercial banks.
He called for effective regulation of the institutions in their operations to build client confidence and also serve the country’s large informal sector.
Growth
The Pro-Vice-Chancellor of the University of Cape Coast, Prof. George Oduro, said available information indicated an increase in the number of microfinance institutions from 2,028 to 3,107 between 2014 and 2015, translating into a remarkable increase of about 65 per cent.
He, however, stated that the impact of microfinance institutions in the country had been mixed.
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