CICMG urges government to introduce LI to regulate credit market
The Chartered Institute of Credit Management Ghana (CICMG) is calling for the introduction of a Legislative Instrument to properly regulate the credit market and reduce the high Non-Performing Loans.
Speaking at the institute 10th Anniversary Celebrations of the Chartered Institute of Credit Management, Ghana, Director General and Registrar of CICMG, Amo Agyapong, said Ghana should replicate countries such as USA, UK and Japan that has a strong credit system, emphasising the need to modernise Ghana’s financial system.
“In order to develop credit management in Ghana and to ensure that standards are set based on best practices, as well as the provision of services geared towards enhancing skills and capacity building of those involved in credit functions, there is the need to enact legislation to sanitise the sector, promote professional training in credit management and regulate the practice of credit management in the country. Having a Legislative Instrument that safeguards the sector’s operation would be of more benefit than having just one aspect of credit management regulated”.
“As we are all aware, for the economy to grow to the point of providing desired jobs and wealth creation, there must be credit extension at all levels of industrial and commercial activities. However, credit business extended or granted under a sloppy arrangement is an evil worse than an economy driven by a cash-and-carry regime”, he pointed out.
“All over the world, businesses extend credit to one another. Nonetheless, successful management of these credits has been hampered in our part of the world, abused to a large extent, following a lack of standards, unethical conducts and insider abuse”, Mr. Agyapong said.
Credit Systems Necessary
Continuing, he said an economy driven by credit system ensures that national and statutory institutions put in place systems that regulate, set standards, moderate ethical conducts and build capacity of the people involved in managing, controlling and monitoring credit at all levels of credit activities.
According to him, addressing the gaps inherent in the drawbacks to an efficient credit system shape practices in the industry.
Furthermore, he said the incidence that triggered the world economic and financial meltdown in years back stemmed largely from improper attention to sound and controlled credit management system. This, he said thus, re-enforces the need for every country to provide necessary safeguards and infrastructure to protect local credit market economy.
He expressed the Chartered Institute of Credit Management, Ghana commitment to bringing changes to credit business at all levels in Ghana and influence structures of risk measurement to protect the balance sheet.