Head of Retail Business at Societe General Ghana, Obed Hoyah has defended the Bank of Ghana’s decision to sanitise the country’s microfinance, savings and loans institutions.

About 386 insolvent microfinance and microcredit companies have had their licenses revoked by BoG.

The Bank of Ghana backing their decision, explained the move was part of new measures to ensure that existing institutions remain structurally and administratively safe enough to continue with their businesses by complying with its regulations.

However, Mr Hoyah in an interview with www.ghanaweb.com commended BoG for being proactive in salvaging the 'sick' banking sector that possess an eminent threat to Ghana’s economy.

He added, it is through banks that savings are mobilized and channelled for productive uses in the economy which includes lending out loans to individuals, organizations and even government to meet important needs.

“Savings is one of the things that develop a country. I don’t know of any country that has develop without the citizen’s saving money. When banks receive deposits, we use it to fund development in the country. When people are looking for money to expand their businesses, they come to banks. So if you don’t have a number of citizens saving their money with banks, the banks are not also able to help grow the economy”.

He continued by saying, once the financial environment is sanitized, it builds the confidence in people to save in banks.

“After this exercise, people will be confident to bring their monies and put in banks rather than keeping them under beds and trunks which doesn’t help the economy”, he identified.