ProCredit Savings and Loans Company Ghana
Since introducing a political liberalisation process in the 1990s, Ghana has enjoyed political and economic stability, with its democratic reforms serving as a model for the region. In addition, GDP has grown strongly in recent years, especially following the recalculation of the country's key economic indicators to include important emerging sectors, such as the communications, oil and certain service industries.
The population of Ghana is divided into some 75 ethnic groups. In the recent census of 2012, the estimated population of Ghana reached a total of 25 million. The most densely populated parts of the country are the coastal areas, the Ashanti region, and the two principal cities, Accra and Kumasi (source: Ghana Embassy, Washington D.C., www.ghanaembassy.org/index.php?page=population).
Real GDP (with oil) grew 7.1% in 2012, following 14.4% growth in 2011 (source: Bank of Ghana: Monetary Policy Report, February 2013). The service sector was the largest contributor, accounting for 40% of GDP. Agriculture followed with a GDP contribution of 30%, although it remained the largest employer, providing work to 60% of the labour force. In exports, gold remained the leader, followed closely by crude oil (source: Ghana Statistical Service). In 2012, the ratio of domestic private sector credit to GDP was 16.1%, while deposits in banks came to 23% of GDP (sources: Helgi analytics, OECD, Bank of Ghana).
Inflation rose only slightly, from 8.6% in December 2011 to 8.8% by December 2012 (source: Bank of Ghana: Monetary Policy Committee Press Release, February 2013), reflecting the central bank’s tight monetary policy, the government’s fiscal consolidation measures, and improved production and storage of domestic food crops. Economic expansion has reduced poverty significantly; however, the government is still striving to bridge the economic gap between the south and the northern and rural regions. Despite its challenges, the country has made huge strides towards economic and political development, earning it a position among the top five countries in sub-Saharan Africa – and among the top 10 in the world – in terms of relevant economic reforms. Against this backdrop, Ghana is projected to achieve middle-income status within the next 10 years (source: IMF Survey Magazine, February 2010).
Ghana’s financial exposure to the global economy is limited, but the private sector, and especially the banking system, is still directly linked to the global financial crisis through exposures to counterparties in the form of correspondent balances and placements with overseas banks.
As of December 2012, there were 26 banks and 53 non-bank financial institutions, including 19 savings and loan companies operating in Ghana (source: Bank of Ghana). Competition in the banking sector has intensified since the entry of foreign financial institutions, particularly Nigerian and South African banks. By successfully mobilising deposits from the domestic market and improving the loan portfolio quality, the banking industry showed strong signs of growth in 2012. This is reflected in the year-on-year figures, with total assets increasing by 23.5% in 2012 and total sector deposits rising from GHS 15.99 billion (USD 8.4 billion) in December 2011 to GHS 19.58 billion (USD 10.3 billion) in December 2012 (source: Bank of Ghana, Monetary Policy Report, February 2013).
Very small and small enterprises remain an important source of employment in Ghana, with most operating in the informal economy. Some banks have recently sought to enter this sector by expanding their branch networks and working with semi-formal financial services providers to quickly reach this target market. Many small businesses continue to face difficulties in obtaining credit, and agricultural producers have very limited access to the formal financial sector.
ProCredit Savings and Loans Company launched its operations in July 2002 to serve very small, small, and medium-sized businesses and ordinary people who had limited access to the formal financial system. It opened its first branch in Kokomlemle, one of the oldest parts of Accra and an area that is home to many small businesses. Over the years, the institution has expanded its scope from supporting the very smallest businesses to financing larger enterprises, securing its position as a trusted partner to SMEs. By the end of 2012, the company had 26 branches across six of the country's 10 regions, specialising in meeting the needs of small and medium-sized enterprises. The institution recorded a year-end total deposit portfolio figure of GHS 90.8 million (USD 48.1 million), a credit portfolio of GHS 78.8 million (USD 41.8 million) and more than 100,000 clients. ProCredit Ghana remains one of the largest savings and loans institutions in the country. In 2013 the company invested heavily in its IT infrastructure and in staff training to ensure excellent customer service, which means convenience for standard banking transactions and professional and sound advice by its business client advisers and its private client advisers.
ProCredit Ghana is committed to raising awareness of environmental issues, both among its staff and among its clients. In this context, it introduced the group-wide environmental management system in 2013, and is currently constructing a new head office building in Accra, which incorporates the latest energy efficient technology. This environmentally friendly building is scheduled to open in 2014.