CUA top brass in a dilemma over bill

Pg 34. March 14/08

Story Rebecca Quaicoe Duho
TOP executives of the Credit Unions Association (CUA) of Ghana are in a dilemma whether to go ahead with a proposed Credit Union Bill to be passed into an act or change it into a Legislative Instrument (LI) to regulate the activities of credit unions in the country.
The dilemma stems from the fact that the proposed bill, which has been on the drawing board for the past nine years, will have to go through additional periods of waiting when it is presented to Parliament for passage.
However, should the association settle on an LI, it will come into effect from May or June this year.
At a seminar organised for chairpersons of CUA and their representatives from the regions, which also brought together members of the Parliamentary Select Committee on Finance and officials from the Bank of Ghana (BoG), the CUA representatives agreed to go back for consultations with the Minister of Manpower, Youth and Employment, Nana Akomeah, on the way forward.
The Director of the Legal Department of the Bank of Ghana (BoG), Dr Kwaku Addeah, presented the option to them and explained that an LI, which would still put the union under the country’s non-banking financial institutions, would serve the purpose of the association better, whereas opting for an act would also mean the imposition of regulations that pertained to the banking sector on the association, since it also played roles similar to those played by the banks.
A representative of the Minister of Manpower, Youth and Employment, Mr Kofi Kudamey, who is the acting Registrar of Co-operatives, summed it up when he called on the union to “take into account the current macroeconomic situation of the country, since this will, to some extent, have an effect on your service charges, loan payments, investment opportunities and level of savings”.
He said financial co-operatives needed a clear legal basis, appropriate regulations and effective supervision to grow and function sustainably, adding that the legal framework which played double roles should empower them to reach their target population and also ensure that rules in the financial sector were appropriately applied, particularly to protect owners and depositors against poor financial management.
The Co-ordinator of the Tax Policy Unit of the Ministry of Finance and Economic Planning, Mr Kofi Nti, who represented the Deputy Minister of the ministry, Prof George Gyan-Baffour, said the current law, the Co-operative Decree, NLCD 252 of 1968, was totally out of date and did not reflect the current technologically advanced business environment, saying that there was no prudential performance targets, weak regulatory regimes and dissolution procedures.
“For this reason, unscrupulous people have defrauded and still, in the name of credit union, defraud unsuspecting members of the society of various sums of money and their savings,” he said.
“It is the wish of the government that credit unions would be established at all workplaces, among professionals, market women and in all rural communities to assist people to learn how to manage their own resources wisely and become actors of their own future development,” the deputy minister said.
He, however, said any support that the government had provided and was still providing would not be complete without providing the credit unions with the appropriate legal environment that would make them vibrant, competitive, and financially viable, as well as the type of image that would project their future growth and development.
The Managing Director of CUA, Mr Emmanuel Oduro Darko, said the association was developing a deposit guarantee scheme of GH¢600,000 to insure its members.
He said the scheme, which would take effect from 2011, would insure over 500,000 members who formed the association throughout the country.
According to him, the association, which formulated the idea seven years ago, was putting its own mechanisms in place to ensure that all savings that it had were insured.