More stakeholders in the financial sector are pushing for speedy settlement of financial cases at the court to complement the work by the Bank of Ghana to strengthen the sector.
The latest to push for an improvement in the judicial system is the Association of Finance Houses after the Ghana Bankers Association asked for the speedy adjudication of debt issues.
According to Ghana’s laws, if a debtor fails to settle the loan that is due for repayment despite reminders or notices from the bank, the money could be recovered through legal means.
However, financial institutions are worried about the slow pace at which Ghana’s legal system handles debt issues. Earlier the President of the Ghana Bankers Association, Alhassan Andani expressed his frustration about the situation.
“We want the courts to help us, most of the cases are stuck in the court and the judicial system is very slow, sometimes there is a sense that the court system does not appreciate that the monies given to these individuals or firms that are not being paid are for the Ghanaian people,” he said.
The Association of Finance Houses also says if Ghana’s legal system does not improve the financial sector will still face challenges despite the clean up by the Bank of Ghana.
“we give the money to people who know the legal system is slow. So they refuse to pay and some even ask you to send them to court if you like. If you have a case in court for four years, by the time the case is settled the money is worth nothing,” Kokui Adu, the Executive Secretary of Association expressed.
The Bank of Ghana has taken two years to clean-up the financial sector which has led to the collapse of over three hundred institutions made up of banks, savings and loans, microfinance companies and finance houses.
Although Poor management and bank inefficiency have been cited as two of the major factors that caused the collapse of the financial institutions, bad loans cannot be ruled out as the receivers of those institutions have had to retrieve the millions of cedis owed the defunct companies, in some cases publishing the names of the defaulters in national dailies.
The banking industry had a stock of gross loans and advances (both domestic and foreign) to the tune of GH¢36 billion as of December 2018.