Non-Banks Asked To Place Corporate Governance At Core Of Business
Microfinance expert and Executive Director of Microfin Consult, Ishmael Kwesi Otchere, has advised players of the non-bank financial sector to place corporate governance at the core of their business and invest in practical succession strategies that will ensure their sustainability.
According to him, such systems and processes give some level of deposit protection assurance to investors and clients, especially in these times that the coronavirus pandemic is causing shocks to businesses, including non-bank financial firms.
“One major issue confronting the banking sector has been that of governance; the idea that I founded or promoted the business, so I can be there forever, is persistent in the industry, but it doesn’t give any level of guarantee or sustenance to the institution,” he told Business24 in an interview at the seventh annual general meeting of Microfin Rural Bank held at Gomoa Pomadze in the Central Region.
“There should be well-focused, well-planned strategies or succession plan mechanisms that will build the confidence of both clients and shareholders when the founder of the business is no longer involved with it,” he added.
Mr. Otchere applauded the central bank for coming out with directives that mandate non-bank financial services providers to deploy strong corporate governance systems as a form of guarantee to their operations.
With the coronavirus pandemic shaping the way of doing business, the microfinance expert said specialised deposit-taking institutions (SDIs) must employ digitisation in their operations, including strategies for deposit mobilisation and credit administration.
This, he said, must be accompanied with active financial, banking and digital literacy initiatives that will enable them carry their clients along on the digital journey.
“Every change has its challenges, but it is up to the banks to manage them. People still want to see physical cash; it is our responsibility to educate such persons to understand that the traditional ways of doing business do not give an assurance of sustainability.”
As the critical sector that is spearheading the nation’s financial inclusion agenda, Mr. Otchere said SDIs must balance profit-making with the spirit of social sacrifice to better the lot of persons in the communities that they operate.
He said: “The investor needs returns, but in microfinance that aspect of improving the social and economic lives of people within the bank’s operational area is also very key.”
Mr. Otchere is stepping down as the executive director of Microfin Rural Bank, which he founded.
“I am very confident of the team that has been groomed to take over, should the current leadership retire. The bank has a very resilient team of directors who can still drive the social and economic aspirations of the bank, its clientele and the community at large,” he emphasised.
