Use Credit Unions to alleviate poverty - CUA

Hohoe, May 10, GNA - The Ministry of Local Government, Rural Development and Environment has been urged to invest a percentage of the Poverty Alleviation Fund (PAF) in Credit Unions for its high loan recovery rate and credibility in micro financing at the grassroots level.

Mr Paul Kotobridjah, National Chairman of the Board of Directors of Credit Union Association (CUA) of Ghana, speaking to the Ghana News Agency at Hohoe, said disbursement of the fund through Credit Unions would not only stem the perennial default in payment of loans by beneficiaries but impact of the fund on the economy would be enhanced. The Fund now known as the Productivity and Income Generating Fund is a component of the District Assemblies Common Fund (DACF) used as a revolving fund and given to individuals and identifiable groups to embark on self-enterprise businesses, wealth creation activities and subsequent improvement in the standard of living of the rural poor. It has been held back in recent time for its poor loan recovery rate and individuals, institutions and groups owed over 40 billion cedis. Mr Kotobridjah said CUA had a prudent insurance policy on its savings and loans, making it sophisticated for any beneficiary to default in payment of loans.

He said CUA had achieved 100 per cent in loans recovery and therefore, a prudent institution to undertake disbursement of the fund for efficiency towards wealth creation especially in the rural areas. Mr Kotobridjah said there was a correlation between micro financing and poverty alleviation, a crucial component of the Ghana Poverty Reduction Strategy (GPRS), which must not be compromised in wealth creation at the grassroots level.

He said CUA's performance continued to improve over the years with about 499 billion cedis deposited as shares and savings in addition to 325.2 billion cedis granted as loans to members by the end of December, last year.

The National Chairman said CUA now had 192,367 members nationwide from 273 viable credit unions undertaking income generation activities, education, housing, poverty alleviation and entrepreneurs that employed over 1,365 people.

Mr Kotobridjah appealed to the Government to expedite work on the draft Credit Union Bill, which had been on the drawing board since 2000.