Story: Mary Ankrah
The Ghana Co-operative Credit Union Association (CUA) Limited, has called on the government to ensure the passage of a law governing the operation of credit unions to empower them to provide sustainable financial services to improve the lives of people in the society.
This, according to the Board Chairman of the CUA, Mr Cyprian K. A. Basing, would give credit unions the legal backing to take decisions on issues arising from their businesses and maintain sound business practices to create more benefits for its members.
Mr Basing told newsmen at a press conference in Accra last Wednesday that a proposed Legislative Instrument (LI) to govern operations of credit unions would help strengthen their cohesion to promote the socio-economic well-being of the people and also strengthen the source of government funding through the private sector.
“As a private sector initiative, the law would provide credit unions with enabling environment for them to operate and sustain themselves just like any other private institution”, he added.
It is anticipated that the credit union legislative instrument would enhance the monitoring of the credit unions as desired by the central bank and help eradicate unauthorised formation of credit unions by quack individuals.
He observed that it was important to have a credit union law in Ghana so that the unions would be more competitive to sustain themselves in the long-term to be able to serve the poor better.
“Recognising the credit legislative instrument by law is another form of encouraging and appreciating the development of indigenous institutions in Ghana”, he added.
The board chairman was also emphatic that NLCD 252 of 1968 was completely outdated and, therefore, did not respond to the needs of credit unions in the country.
This is because 90 per cent of the provisions in the law covers marketing, farmers, consumers and other co-operatives but not credit unions.
Besides, it did not consider the new trends of business which have come out as a result of changes in technology, the diverse nature of individuals, changes in the mode of business transactions and the need for specialisation in dealing and supervision of particular businesses.
Moreover, the payment of dividends and interest on savings, which is less than 10 per cent, limited the credit union operations to be competitive.
The Ghana CUA is the umbrella body of all co-operative credit unions in the country, which provides an enabling environment for financial and other technical services to its members.
It regulates and supervises all the credit unions in the country on behalf of the Bank of Ghana and other interested groups for sanity to prevail in the market.
CUA provides services to all the credit unions in Ghana, that is examining premises and equipment for the provision of licence to commence business, as well as provides materials to all the credit unions for administrative purposes.
It also audits accounts of the credit unions in accordance to the law of auditing to ensure that there is fairness and justice in the administration of funds in the credit unions in Ghana.
Similary,the co-operative nature of the credit unions provide opportunity for the members to come together to foster peace and unity amongst themselves, whilst the financial nature helps them to develop the habit of savings and wise use of money.
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