Accra, Nov. 28, - Dr Ernest
Kwamina Yedu Addison, the Governor of the Bank of Ghana (BoG), has bemoaned the
low credit facility extended to small and medium-scale enterprises (SMEs) and
the agricultural sector by banks and urged financial institutions to develop
innovative products for the two sectors.
He said as at September this
year, the agriculture sector attracted a paltry 3.7 per cent of the GH₵38.70 billion credit advanced in
the industry, adding that, the SMEs and the agricultural sector were seriously
underserved, considering their relative importance to job creation and economic
growth.
He said notwithstanding the high
risk in these sectors, banks should be innovative by developing credit products
that were suitable from them.
Dr Addison made this known at the
21st National Banking Conference of the Chartered Institute of Bankers in
Accra, on Tuesday, on the theme: ‘‘Building a Robust and Sustainable Banking
System in Ghana’’.
The event afforded stakeholders
in the banking industry the opportunity to discuss the changing reforms in the
local and international economy in order to make them resilient and robust in
undertaking transactions as well as being responsive to the needs of their
clients.
It brought together the top
echelon of the financial institutions in the country who shared their
experiences and ideas aimed at making them competitive and relevant in the
changing banking sector.
The Governor of the BoG said for
the sustenance of the financial market, the Central Bank and government were
playing varied roles to ensure stable macroeconomic environment, saying; ‘‘the
stability of the financial system is in the public interest’’.
Dr Addison said banking was a
risky business and required appropriate regulatory environment and financial
infrastructure to curtail risk inherent in the sector.
He said key factors fundamental
to the regulation of the banking industry includes risk management, corporate
governance, internal regulations and compliance.
He said the recent quality assets
review undertaken by the BoG indicated that some banks assets management were
deteriorating behind credit consideration in the energy sector
These banks, he said, were asked
to submit capital restoration plan to ensure that they meet minimum capital
requirement to safeguard the interest of shareholders.
Dr Addison said the Central Bank
was taking adequate measures to ensure that banks remained in business, and,
therefore, asked universal banks to increase their minimum capital requirement
from GH₵120 million to GH₵400 million to enable them to
undertake high value transactions.
He said complying with the
regulatory framework would sustain the banking sector.
On market discipline, he said,
the credit appraisal of the banking industry enabled proper disclosure
requirement so that market participants would secure relevant financial
information to make informed decisions.
He said, the BoG had issued a
guide for financial publication in line with the international financial
reporting standards and some regulatory specific disclosures.
Dr Addison said universal banks
were supposed to publish both audited and unaudited financial statements
annually and quarterly respectively, while disclosing MPL ratios, capital
adequacy ratios and even breach and liquidity reserves.
Dr Addison said to ensure
stronger banks, there was need to establish robust financial infrastructure to
minimise credit losses in the banking sector and assured that, the Central Bank
had instituted the credit referencing and collateral registry to help profile
creditors and closing regulatory gaps in the financial sector.
GNA
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