Ghana: Rating service for small financial institutions
Accra, Ghana, October, 30 2007 -
Support Programme for Enterprise Employment and Development (SPEED) an NGO, has introduced a multi-donor rating service for smaller financial institutions in Ghana. The rating service is expected to enhance performance and transparency of the micro finance sector.
At a press briefing in Accra, Mr. Ken Appenteng Mensah, a micro finance expert said Ghana would be the second country in Africa after Uganda to have introduced the rating service.
So far, a meeting of stakeholders of the micro finance industry in Ghana has been held on October 26, 2007 to discuss the introduction of a rating service for rural and community banks, credit unions, saving and loans and financial NGOs.
“Rating examines financial institutions in Governance and decision making, risk management, product and services, financial statements, efficiency and profitability and client friendliness,” Mr. Appenteng Mensah said.
He said the rating service is meant to assist board and management of smaller financial institutions to enable them gain an accurate, objective and thorough picture of all the different elements of their financial institution.
Clients and consumers of these institutions would also be assured that the institutions they trust their money to will be transparent and committed to professionalism. Further more, international lenders and commercial banks would be informed on when a loan is appropriate for a smaller financial institution.
Mr Appenteng Mensah said policy makers will use the rating service to make appropriate decisions for the financial institutions.
Mr. Henk Van Oosterhout, an international micro finance expert hoped the mechanism being adopted for the rating service would help do away the lack of transparency that currently persists in the small financial institutions.
He said the rating service would be reviewed in about three years to know whether they are on track and what other innovations could be brought on board.
This is an initiative of SPEED Ghana, a GTZ-DANIDA Government of Ghana supported technical programme, which also offers a wider support package to the micro finance industry.
SPEED facilitates the development of the financial markets and business services for micro, small and medium enterprises, which in turn contribute to their increased competitive.