Category Archives: Opinion

FINANCIAL EXPERTS TO NOTE

Its amazing how quick humanity forget lessons that are meant to be learnt through events that we encounter. The world financial leaders must indeed show remorse for failing the world in the first place and be moderate and selfless in their decision making. Taking a cue from President Barak Obama and Prime Minister Gordon Brown’s advice, it should be the best reasoning to think over. Besides a failure in one part of the world now means the entire world must suffer, something so inevitable with the continious global villaging process. My point, let those in charge of the rest of us be mindful of our needs too and make room for our survival too. The recession might be ending but lets give it the space to settle down properly before we zoom in to events that brought it about.

Ekuba Quarmine

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The effects of money laundering on African economies

Money Laundering has over years helped drug barons stay in business with assistance of certain financial institutions simply because some of these institutions are in one way or other benefiting from the illegal trade. Money frome drug transactions is put in to the formal f inancial system for future  dealings thus  enhancing continuity at the detriment of society and economies. Some banks in Africa are seen to be having returns  that are not commensurate to their legal investment which sometime makes people to wonder how  these bank are operating. In Africa,efforts are being  made by goverments to put a stop to financial organisations aiding drug cartels to continue in business. Drug abuse  in Africa is  not helping the situation in any way. Most of the youth who  are supposed  to be  contributing to the economies are either in drug or are influenced by drug barons to be  either marketers or retailers thereby  diverting their attention from normal schooling

In my opinion, that if finance should work for Africa, the activities of the banks must  be closely monitored.

Sheku Sumaila

DEMOCRACY MAKES GHANA SHINE

Ghana is fast becoming the most attractive destination for foreign investors in West Africa. The country has enjoyed a considerable amount of stability for the past fifteen years and this has meant that the country has been able to develop economically. Over the last decade, Ghanaians have gone to the polls twice and have been able to change their governments peacefully. And now, one can only believe that the culture of Democracy is fully entrenched. With the smooth transition from one government to the other and the  current freedom of expression that I see in this country, I have no doubt that this country has a very bright future. Well for those of us who do not  the luxury od Democracy in our  own countries, we can only stand by and admire as the BLACK  STAR shines on her people. But all is not lost, perhaps the rays from  the Black Star will one day penetrate acrooss the rest of the continent and bring about the desired change. I cannot but admire Ghanaians and the path they have taken.

Louis D Mendy

PRO: A good way to get started

Insurance companies like many other business entities, have one main target which Profit is making. They are not institutions of charity.
They play a very crucial role in the lives of their clients by acting as their cushion in uncertain times. They sell Premiums to hundreds if not thousands of individuals who put their monies together in a pool to serve as cover for all.
Therefore for the companies to be able to adequately cover for everyone when the need arises, it will be important that each contributor’s state of health is ascertained before they become a part of that family. It is not an issue of Human Rights abuse here, but simply a logical business practice. Sick people cannot be expected to sign any contracts.

A classical example will be signing a chronically ill person alongside someone who has no health problem at all. Will it then be fair to make a full pay out in the event he or she dies the following day? Am afraid it will not be!

It’s true that in some instances companies screened the blood of their would-be clients without telling them the reason for doing so. But would anyone blame the companies for protecting their interests? After all it is the prerogative of the clients to ask as many questions as they can about what they sign up to. A failure to realize their rights cannot be attributed to any foul play by the insurance companies. In the Holy Bible we are told, each man is your brother’s keeper. But in business, you are not your brother’s keeper.

Louis Mendy

Pro

Susu collectors have been engaging in this business in and around Ghanaian markets for quite a long time. The practice is very easy and provides useful service for small business owners.

The Susu scheme works in a simple way. Traders pay a small amount of money, ranging between 1 cedi to 10 cedis, of what they earn in a day to a Susu collector. At the end of the month, the Susu collector pays out lump sums to the clients, while keeping one day’s payment from each customer for the service.

It’s been argued, the people on the Susu scheme are losing out because they are not earning any profit. The proponents of this argument will think differently if they find themselves in the profession of these petty traders and bus conductors.

For such people leaving their businesses to join a queue at the bank to make their daily savings means losing money and customers. With the Susu collection you spend less than five minutes and often the susu collector will come to you to take your savings. Every second counts when it comes to earning money. Thus, the loss that will be made by going to the bank will surely be more than saving with the Susu collector.

The importance of susu collection can’t be measured when one considers the small loans they have been providing to help customers establish or develop their businesses. Interestingly, unlike the banks where you would have to pay interest on your loan, the Susu collector is not taking a dime. All you need to provide is a copy of your savings card, and that’s it; your loan in just less than 10 minutes. You don’t need to move from one section to the other signing loan agreements. Just imagine paying 10 percent interest on your loan in addition to the administrative charges. Clearly, the Susu scheme is not just about convenience, it’s also helping to promote micro finance initiative in Ghana.
I’m sure those who think that the Susu scheme is not a best practice will also consider the unemployment situation in Ghana. These Susu collectors have created job opportunity for themselves-we are talking about 4000-, and they are making good use of the scheme by even creating same opportunities for others. They have trusted agents who collect moneys from clients who can’t make it to the Susu collector’s place. If the Susu collector is earning something modest for his services, we need to be grateful that he did not venture into robbery.

The Susu programme may not be at the same level with the banks in terms of logistics, but they are providing a convenient means for petty traders to save. Therefore government should assist to these existing, indigenous financial institutions. They should acknowledge these susu collectors that are already providing services such as loans and savings facilities to the less privilege.

Obviously, the decision of low income earners to take part in the Susu scheme is not out of ignorance or lack of financial literacy, it is based on sound financial judgement.

Bernard Agyemang

Micro-insurance companies go to the poor

Insurance for many people in the developed world is a must have. At the same time, this is a completely different story for millions of other people in the developing world, most especially in Africa. But there is light at the end of the tunnel as companies are now reaching out

In Ghana, Insurance companies have now taken the initiative of reaching out to low income earners, bringing insurance policies to their doorsteps. This is a complete switch from the past where it was only big business and the wealthy that could have access to insurance policies.
In Tema, about a thirty minutes drive from the capital Accra, the Donewell Insurance Company is having an awareness campaign. At the local fish market they set up a tent and invite people using a PA system.

Blood test before policy

Once prospective clients arrive, Agents first screen their blood before they register them. The company says the process is part of their Corporate-Social responsibility but it’s obvious that they do not want to take on high-risk clients. People with a chronic disease cannot sign a contract with the company.

While some agents screen prospective candidates, others meanwhile sit at tables and answer questions. One of the candidates Comfort Aidoo has come smartly dressed and looks ready to sign up. Starting the following day she will have to pay one Ghana Cedi to her agent every day. Her agent will keep that money for three months after which she gets half the money back.
She says that the business she’s doing is not so profitable. “I bought the policy because I can make daily savings of just one Ghana Cedi and get quite some money after three months”, says Comfort Aidoo. But the other half of her money is saved for her as life insurance. If she pays in for 30 years, that money plus the interest will equal over 50,000 Ghana Cedi.
“I know that when I grow old, I will not be able to work anymore. So I believe this policy will help me”, says another man in the tent.

A lack of understanding

The rush to sign up new clients is heating up in Ghana. But not everyone that signs is fully aware of the consequences. Nicholina Asante is one of the Sales Agents and she says its hard work explaining the policy to her clients: “Every day I go to my clients and keep explaining the policy to them. At first they find it difficult to understand, but later they catch up.”

But understanding alone is not the only challenge. Back in Accra, Robert Dzogbenuku, Country Manager for Micro-ensure says trust also needs to be established. “Insurance has not been doing well in Ghana because in the past, companies were reneging on paying claims.”

Small scale business, huge market potentials

A good thing about Micro-insurance is that it lifts people from poverty and helps them save for the future. The money these small business owners pay in every day is only a small amount. But all that money together is big business for the insurance companies.
However, if the companies really want to tap into that money, they will have to reach out even more. Trust, coupled with transparency are two key issues the companies will have to deal with if the industry is to be accepted by the ordinary Ghanaian.
LOUIS D MENDY

Micro – insurance indeed

Micro insurance is a new phenomenon in Ghana which the National Insurance Commission is promoting. As of now, five companies have signed on to this initiative and have already got to work. But I wonder why now, considering that there are much more people in the informal sector who also need some sort of protection, just as the wealthy and big businesses. I am talking here about more than 70 percent of the population of the country.

In the first place I believe the marginalization of the poor and their businesses from the mainstream insurance industry was a big miscalculation by the companies and banks as well. If one considers the huge potential of this vastly untapped market and how it can bring about a radical change in the lives of the affected people, then one begins to see the enormity of the problem I am talking about.

The proliferation of Micro-insurance policies in Ghana can only be a welcome gesture as it helps to lift people from poverty while helping them to save for the future. At the moment, many small scale business people in Ghana are embracing the concept of micro-insurance, but it is my worry that not all those who sign up are aware of all the issues involved. Therefore, it would a necessity for the companies to take it as a responsibility to adequately inform their clients. And in this our world of commercialization, I would also like to urge the clients to inquire fully about their policies before they buy to protect them against exploitation. Micro-insurance is good but care should be taken not to lead the already less privileged into more poverty.

Odelia Ofori