Veep Inaugurates Access Bank, Ghana

The Vice-President, Mr John Dramani Mahama, has urged financial institutions to expand credit facilities to small and medium-scale enterprises (SMEs) since they have the productive energies to propel the growth of the country’s economy.“It is on the shoulders of this sector that we can leverage the productive energies to accelerate the growth of this economy,” he said.Mr Mahama made the call when he inaugurated Access Bank (Ghana) Limited, a new financial institution, into the Ghanaian banking industry in Accra yesterday.Access Bank (Ghana) Ltd is a subsidiary of Access Bank Plc, a fully-fledged financial services provider in Nigeria with banking subsidiaries in the United Kingdom (UK) and eight other African countries, including Ghana. It is ranked 10th in Africa with $5.6 billion total assets as at March 2009 and total shareholder’s funds of $1.3 billion.Mr Mahama said global recession and imprudent management of the economy in recent times had created adverse economic conditions, which had increased the default rate of the SMEs.That, he said, had left many of the banks holding significant stocks of bad debts from SMEs.The Vice-President, therefore, urged the financial institutions not to renege on their core duty of providing credit facilities to SMEs.“The government is committed to an efficient management of the economy by creating conditions in which SMEs can thrive and grow.”Mr Mahama said for now, the central bank was not eager to see an increase in the number of new banks, and indicated that the way to go was to encourage mergers that would create stronger banks with a bigger capacity to finance the accelerated growth of the economy.“This would stop us going cup in hand to the multilateral and bilateral donors seeking financing for our budgets every year,” he said.Besides, he said the merger of financial institutions would ensure free movement of capital in the sub-region, and charged management of Access Bank to play a role in that regard.Mr Mahama said a harmonised payment would enable Africa to meet some of the competition from other sub-regional groupings in Europe and Asia which benefited from the synergies accruing from their harmonious payment systems.Mr Mahama commended Access Bank for its determination to play an active role in key sectors of the economy such as oil and gas, telecommunications, construction, cocoa and manufacturing to accelerate the growth of the country’s economy and create wealth for local businesses and individuals.The Minister of Finance and Economic Planning, Dr Kwabena Duffuor, in a speech read on his behalf, charged financial institutions not to focus too much on the oil and gas sector to the neglect of the agriculture sector.He said agriculture was the pillar of the country’s economy since 60 per cent of Ghanaians depended on the sector.Dr Duffour said the government would continue to motivate financial institutions to facilitate access to credit to SMEs to stimulate the country’s economic growth.The Governor of the Bank of Ghana, Dr Paul Acquah, said the financial sector had been undergoing a wide range of reforms focused on transforming the industry and developing a robust and fundamentally sound financial sector with universal banks as the core.According to him, the sector had seen a rapid growth in terms of number of institutions, deposits and branch networks, which, he said, had increased from 332 in 2003 to about 660 at present.Additionally, Dr Acquah said the expansion of the loan portfolio had also seen an appreciable growth where products offered by banks were becoming increasingly diversified to better serve the needs of customers, adding that “total assets of the banking system has increased ten-fold from GH¢1,866.4 million in 2002 to GH¢11,706.2 million in June 2009”.Key contributory factors to this growth, he said, included legislation such as the Anti-Money Laundering Act (2008), the Credit Reporting Act and the Borrowers and Lenders Act, which he assured should serve to minimise the incidence of default and encourage respect for contractual obligations in the credit system.More important, Dr Acquah said the Non-Banking and Financial Institutions (NBFI) Law, passed last year, had been designed to regulate the whole range of financial and micro-credit institutions actively involved in financial intermediation.The Chairman of Access Bank, Mr Herbert Wigwe, said the bank had shareholders funds in excess of US$1.6 billion and an asset base of over US$10 billion as at March 31, 2009.He said the bank had been acknowledged worldwide for its high ethical standards and adoption of best practices in every facet of its operations.Notable among key priorities, he said, was a multi-million dollar partnership with the International Finance Corporation (IFC), the private arm of the World Bank, for the development of women-owned businesses under the Gender Empowerment Programme.This initiative, he explained, would cater for the business needs of women entrepreneurs as it aimed to increase contribution of women to the national economy.“We are here to work hand in hand with the people of Ghana to foster development in all facets of the economy.” he assured, and implored all Ghanaians to give the bank an opportunity to partner the government in the country’s development agenda.