German financial institution holds workshop on Responsible Finance

Accra, May 31, GNA - In an effort to stem the emergence of another global financial crisis, KfW Bankengruupe, a German Development Bank, on Tuesday organised a day's workshop on Responsible Finance for stakeholders in the financial sector. Responsible Finance is about promoting more transparent, inclusive and equitable participation of the underserved population in the financial markets.

Speaking at the programme, Dr Kofi Wampah, First Deputy Governor of the Bank of Ghana, praised KfW for organising the workshop as it would help the country put in place measures needed for a healthy functioning of its financial systems. He noted that the concept of Responsible Finance gained grounds particularly following the advent of the global financial crisis and was considered to be one of the primary responses to the financial crisis.

Dr Wampah said Responsible Finance had been applied through prudential supervision and preservation of financial stability and harmonisation of monetary and fiscal policies. It should not only be viewed as a supervisory and prudential role of the Central Bank, but also an integral and essential part in the monetary and fiscal policy decision making process. "It constitutes an obligation on the Central Bank to provide savers with a system of strong financial institutions that ensure that the conduct of their operations is in line with the best business principles and international standards," he added. Dr Wampah said the Central Bank was taking a critical look at the operations of microfinance institutions with the view to streamlining their activities and making them more relevant to the financial growth of the country.

He noted that the role of Microfinance Institutions in ensuring credit availability to the poor people and small entrepreneurs was critical in the sustainability of growth in poor and emerging economies.

"They have provided an avenue of the financial services to the disadvantaged segment of the population who by design cannot avail themselves to the services of the traditional banks and financial institutions," Dr Wampah added.

He appealed to micro financiers not to seek abnormal profits from their clients as such acts had left borrowers indebted to them. He said this evolving disturbing trend in the microfinance sector had become a concern for all as it had the tendency to steer the world's economy towards another mini financial crisis, which could have disastrous implications for the alleviation of poverty. Dr Wampah urged stakeholders to be prudent in their dealings and for micro-lenders to possibly adopt guiding principles such as transparency, confidentiality, fair pricing and information access in their approach towards issues relating to microfinance. He said in a bid to instil discipline and to ensure sanity in the microfinance sector, the Central Bank had established a Micro Finance Supervision Unit and also put in place appropriate training programmes for staff of the Unit.

"We are also in the process of finalising the Operating Guidelines and Operational Manuals for Microfinance Institutions in Ghana as well as organising stakeholders' workshop for microfinance institutions in the southern and northern sectors of the country," he added.

He pledged the Central Bank's commitment towards assisting the financial sector to remain safe for customers whilst ensuring that financial institutions provided responsible finance. Mr Eberhard Schanze, German Ambassador, lauded Ghana for its economic credentials and positive financial setup and urged borrowers to pay up in order to ensure the continuous growth of financial institutions in the country.

Ms Monika Beck, Division Chief, Private and Financial Sector Development Africa, KfW Bankengruupe, said KfW was a leading German development bank and it had carried out a lot of financial activities on behalf of the German government. "With a portfolio of around 2.3 billion Euros, KfW on behalf of the German Government is one of the world's foremost financiers responsible for responsible microfinance," she said. Forty stakeholders from the financial sector participated in the works= hop.