The Ghana Cooperative Credit Unions Association (CUA), the union responsible for regulation and supervision of all credit unions in the country, has appealed for government to see to the release of its locked-up funds in financial institutions following completion of the Bank of Ghana’s clean-up exercise.
According to the General Manager-CUA, Emmanuel Coffie, following the revocation of licences from 347 micro financial institutions, 23 Savings & Loans and eight finance houses in the country by the Bank of Ghana – as well as other fund management companies regulated by the Securities and Exchange Commission (SEC) – investments of the union have been locked up and are yet to be released.
“It will be noted that before the outbreak of coronavirus there was a clean-up exercise done by the BoG; and that made us to have a lot of our funds locked up and we have not received them. So, coupled with this COVID-19, we are really struggling to survive.
“We were doing investment in various portfolios of fund managers and also investing with some financial houses and savings and loans, but the bulk of our monies is with investment companies that are licenced and supervised by SEC. We are therefore calling on government to see to it that our locked up monies are released by the respective receivers appointed. When that is released, then we can maintain our operations and run smoothly,” he emphasised.
Commenting on the impact of COVID-19 on CUA’s operations, Mr. Coffie indicated that it has been a serious one as members who have taken loans are not able to pay – leading to liquidity challenges with most of the credit unions.
“Now, members are not depositing money in our facilities again; the little that they have, they are taking it. So there are lot of withdrawals, leading to operational challenges in our facilities. Operational cost is now so high that they cannot even conduct AGMs to account to their members; meanwhile, ours is member-based; so once there is no accountability, members feel jittery and begin to lose interest in the credit union – hence wanting to come and withdraw their money,” he bemoaned.
He added that management of the credit unions are considering laying off some workers or asking them to proceed on leave, as income is not coming but expenditure is increasing, making it difficult to pay. “However, we are also soliciting some support from our donor partners, so once we are able to get that one then we can maintain the staff; otherwise, it will be difficult to maintain staff,” he stated.