Savings and Loans(S&L) have been in existence in Ghana for many years in primeval or informal form in rural communities to offer financial assistance to agrarian and non-agricultural businesses until it was formalized.
The term Savings and Loans Companies is a legal term given to a non-bank financial institution in Ghana. The law passed in 1993 known as the Financial Law (Non-Banking) PNDC Law 328 was to regulate the Non-Bank financial Institutions. It has currently been replaced by the Non-Bank Financial Institution Act, 2008 (Act 774).
S&L Companies are basically financial institution that specializes in accepting savings, deposits, and making mortgage and also giving out loans to its customers to grow their businesses.
The introduction of Savings and Loans Companies and their rapid growth followed the passage of the 1993 PNDC Law 328. This law streamlined the activities of S&Ls to a range of services and are most active in microfinance and small-scale intermediation using various microfinance methodologies.

Also, they have been most effective in reaching large numbers of savers due to their location in urban and pre-urban areas.
Over time, Savings and Loans Companies adapted highly innovative microfinance strategies which made their services accessible to their relatively poor but financially active clients. They also operate on the basis that, a client must save with them over a specified period before they can apply for a loan.
The Apex body responsible for the activities of Savings and Loans Companies in the country is the Ghana Association of Savings and Loans Companies (GHASALC) which was registered in 2008 under the laws of Ghana.
GHASALC serves as a unified voice of Savings and Loans Companies in dialogue with stakeholders in the financial sector in the country. It also enlightens the general public about the specifications and functions of companies to promote a better knowledge of the sub-sector.
The vision of GHASLC has been to elevate the business of Savings and Loans Companies in Ghana to be one of the best financial intermediaries in Africa.
Savings and Loans Companies eventually became an integral part of the financial institutions in Ghana and they have exhibited great potential for contributing to the growth and promotion of financial inclusion agenda of the country.
Unfortunately, on August 15, 2019 the Bank of Ghana (BOG) revoked the licenses of 15 Savings and Loans Companies in Ghana.
BOG explained that its action was necessary to scrape out institutions who were still insolvent after a reasonable period within which the Bank of Ghana has engaged them in the hope that they would be recapitalized by their shareholders to return them to solvency.
This action did not only cause job loses to thousands of employees of the defunct companies but unfortunately fractured the confidence of many Ghanaians in most microfinance institution.
Furthermore, Ghana’s financial Inclusion campaign was also affected because instead of getting more people financially inclusive, total withdrawals was the order of the day.
Nevertheless, BoG has given assurances that it is committed to ensuring that the remaining institutions stay resilient, inclusive, and supportive of Ghana’s economic growth path.
Also it assured Ghanaians that it will persistently intensify on-site examinations and enforcement actions including the application of sanctions for non-compliance with statutory, prudential and other requirements, and ensure that early warning signs of distress are mitigated by regulated institutions expeditiously.
Mr. Yaw Gyamfi, the Executive Director of the Ghana Microfinance Institutions Network (GHAMFIN) in an exclusive Interview with Micro Watch commended the exercise. He encouraged Ghanaians to continue to save with the remaining Savings and Loans Companies for their financial development because the exercise has made the sector more reliable now than ever.

Savings and Loans Companies in Ghana are therefore very viable and playing their roles efficiently to promote financial inclusion and also alleviate poverty.

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