GHASALC advocates common clearing house, regulatory adjustments

The Ghana Association of Savings and Loans Companies (GHASALC) has outlined its top regulatory priorities with the establishment of a common clearing house for Savings and Loans Companies (S&Ls) and Finance Houses at the top of the pile.

This, Executive Secretary of the association Tweneboah Kodua Boakye says, is a strategic move geared toward enhancing operational efficiency, reducing risk and bolstering the Specialised Deposit-Taking and Non-Bank Financial Institution (SDI-NBFI) market, which is in excess of GH¢17billion.

Speaking on behalf of GHASALC, the association’s executive secretary highlighted the significance of a common clearing house for S&Ls and finance houses. The clearing house, he explained, is an intermediary institution in the financial industry that will facilitate seamless transactions by managing the clearing and settlement of trade between buyers and sellers. This move is expected to reduce counterparty risk, ensure timely trade completion, and centralize risk management.

Mr. Boakye noted that universal banks currently benefit from overnight lending due to the presence of a national clearing house. GHASALC believes that the implementation of a similar mechanism for non-bank institutions would level the playing field and provide equal opportunities for S&Ls and finance houses to engage in overnight lending.

“We are looking for a time when we will have a common clearing house for the S&Ls and the finance houses. It is one of the key things we are looking for in the non-bank sector. This will also reduce processing time for our clients, which is one of their key concerns. The commercial banks are able to do overnight lending as a result of having theirs,” he said.

Furthermore, GHASALC expressed its intention to merge the association with that of the finance houses. It said the decision is justified based on the similarities in their operations and combined assets, which exceed GH¢8billion.

Accounting for a significant portion of the non-bank segment, this consolidation is anticipated to streamline industry efforts and strengthen the collective voice of these institutions.

Act 930

Mr. Boakye also raised concerns about regulatory requirements that non-banks must meet, which are similar to those required by commercial banks under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). While acknowledging the effectiveness of Act 930 in ensuring the financial sector’s soundness, GHASALC emphasised the need for a more tailored approach for non-banks.

They advocated a specific legal instrument that addresses the unique challenges and characteristics of non-bank entities, similar to the separate arrangement in place for rural banks even though Act 930 also covers them. Such a differentiation, the association believes, would foster a more favourable environment for growth and compliance within the non-bank sector.

“While we acknowledge the overall effectiveness of Act 930 in promoting the financial sector’s stability, it is important to address the fact that certain provisions within Act 930 have proved to be burdensome for entities not classified as commercial banks.

“Some requirements are particularly onerous for non-bank institutions. We strongly advocate the adoption of a dedicated legal instrument tailored specifically for non-bank entities. Just as there exists a distinct legal framework for rural banks, even though they fall under the purview of Act 930, we believe that a similar approach should be extended to our category of non-banks,” he elaborated.

National microfinance policy

GHASALC also highlighted the development of a national microfinance policy, which it anticipates will provide clear guidelines for the sector’s operations. The policy is expected to serve as a roadmap for non-bank institutions, offering direction and regulatory clarity.

The association comprises a group of twenty-five members which collectively oversee more than seven million customer accounts. By the end of 2022, their combined assets had reached an estimated GH¢5.7billion; controlling 33 percent of the specialised deposit-taking and non-bank financial institution (SDI-NBFI) market.

Additionally, these members operate from a network in excess of 570 business outlets spread across all 16 regions of the country, employing over 7,000 staff.



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The Ghana Association of Savings and Loans Companies (GHASALC) has outlined its top regulatory priorities with the establishment of a common clearing house for Savings and Loans Companies (S&Ls) and Finance Houses at the top of the pile.