HFC Bank launches Boafo Microfinance Services

Accra, April 20, GNA - A joint venture between the HFC Bank (Ghana) Limited and the CHF International (an foreign-based financial institution), has yielded to the establishment of the Boafo Microfinance Services Limited, to service credit demands of low and moderate income Ghanaian households, to maximize their potential in their pursuit of shelter, business, education and other opportunities.

Potential borrowers are required to open savings account with the Bank with an initial deposit of 100,000 cedis, to be able to access a loan between the tune of 5,000,000 and 200,000,000 cedis.

Mr. Asare Akuffo, Managing Director of the HFC Bank, at the launch on Friday, said the Boafo project was a build-up on the Informal Sector Operations (INSOP) introduced by the Bank in 1995 to offer micro financing to traders.

He said based upon the successful patronage and management of the project, which currently had over 2,500 customers in Accra, Tema and Kumasi with a hundred percent loan recovery.

He said the CHF International had pledged its commitment to provide technical assistance and initial management over the next two-year period.

Mr. Akuffo explained that the bank intended to expand this service to other branches of the bank nationwide.

Prof. Gyan-Baffour, Deputy Minister of Finance and Economic Planning commended the HFC Bank and its partners for the initiative to help eliminate widespread poverty among low income earning Ghanaians living at the grassroots.

He said the initiative would help enhance the government's effort of eradicating poverty and attaining the Millennium Development Goals.

Mr. Gyan-Baffour said though the government had introduced various credit schemes in the country, it had still not met its target of 3.8 million people who required such financial assistance. "Government has been able to provide only 230 billion cedis to about 150,000 borrowers so far, which is less than five percent coverage," he said.

The Deputy Finance Minister however, urged the Bank to target micro scale retailers, including petty traders and hawkers and grass root productive units like farmers, fishermen, fishmongers and artisans as well as vocational jobs like hairdressing, dressmaking, catering, craftsmen, and way-side mechanics.

He also advised managers of the scheme to ensure inbuilt mechanism to ensure that loans to the productive sectors of the economy and were repaid for sustainability.

He said; " Micro-credit schemes imitated in this country have failed to make sustainable impact on poverty reduction because of problems of default on the part of beneficiaries," adding that the fight against poverty was national challenge and urged other financial institutions to emulate.

Dr Judith Hermanson, Senior Vice President of CHF International and expressed appreciation to the HFC Board of Directors for their commitment to the joint venture and for the confidence they had placed in the CHF.

She stated that the joint venture was the first major credit initiative that CHF was undertaking in Africa, although it had worked for a long time throughout Africa and hoped it would bring the best of both worlds to micro-enterprises and the financial sector throughout the country. 20 April 07.