4,000 Jobs Lost as Ghana Shuts Down Finance Houses

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SWITZERLAND, AUGUST 22 – The Savings and Loans Association of Ghana is predicting that about 4,000 direct jobs will be lost following the revocation of licenses of twenty-three insolvent Savings and Loans companies and Financial institutions.

The Bank of Ghana (BoG) on Friday, August 16, revoked the licenses of twenty-three insolvent savings and loans and finance house companies.

According to a statement from the BoG, “The revocation of the licenses of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”

Reacting to this development, Executive Secretary of the Savings and Loans Association, Tweneboah Koduah Boakye, noted that out of the 15 affected savings and loans companies, the predicted jobs to be lost stands at about 4,000.

The impact of these job losses, according to Mr. Tweneboah will also be felt by customers who started businesses with these companies as well as families who depend on these workers for survival.

He, however, expressed hope that per the statement issued by the BoG on the license revocation, the services of some workers of these defunct savings and loans companies will be employed in the receivership process to ensure a cut down of the number of predicted job losses.

“As it stands now, out of the 15 savings and loans companies, we have about 4000 people who were working in these institutions and so it is our expectation that the receiver will use the services of some of these people. From the communique that was issued by the central bank, they said they are going to use the services of these employees in the receivership process. The statement also stated that those who will not be employed, it is expected that their severance package is also paid and so we are of the view that the receiver will work with some of these people and to make sure that the number of jobs loses at the moment is reduced. It is a worry that you lose your job, let us monitor the space and see that we will all get a good solution.

“Yes, there’ll be some job loses. Not only the people working in the companies but also with customers who were doing business with these companies. Also there are some families who depended on these companies for their survival and so let us all see that yes, there’ll be some effects but let us believe that if we all support the remaining institutions for them to become stronger, they will be able to serve the populace far better and then new companies could come on board to also serve the other areas. so it is our belief that the work of the receiver is also critical in ensuring that we get the best out of the whole exercise” he noted.

Mr. Tweneboah, therefore, called on stakeholders of the financial sector to come together and ensure what led to the collapse of these companies do not happen again.

“Some time ago we were all blaming the central bank for in action. Now they have taken the action that we are looking for. It is fair that better late than never. yes, it should have been done earlier, but now that it has happened, what we need to do as people is to make sure that what led us into those situations do not come up again. We should also bear in mind that the strongest financial institution if there is a panic withdrawal, they cannot withstand. To a larger extent, the survival or the tomorrow of the sector depends on our actions and inactions as citizens, as customers, as shareholders, management of these institutions and the regulators. 

Of course, the role of government is also critical. What kind of policies that they also put up to help these businesses. So let us come together and help the processes and it is our belief that we are going to have a better tomorrow in the sector” he said.

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