Introduction
The Vice-Chancellor, University of Ghana, Vice-Chancellors, Rectors, Presidents and Leaders of member Universities and Institutions, Registrar of Co-operatives, General Manager of Credit Unions
Association, and all invited guests, I welcome you all to this important gathering. This gathering affords me the opportunity to give an account of the Board’s stewardship for the first year spanning July 1, 2018 to June 30, 2019. I say Ayekoo to all members for the continuous patronage and loyalty to the University of Ghana Cooperative Credit Union.
Economic Overview
During the year under review, Ghana’s economy experienced a decline in inflation from 9.6% in July 2018 to 9.4% in July 2019, suggesting that the purchasing power of our members have been fairly stable. Similarly, the monetary policy rate has also declined during the same period from 17% to 16%. However, as many of you are aware, the financial sector has experienced some turbulence. Five (5) distressed banks have been consolidated. The total number of banks operating in Ghana has reduced from thirty-three (33) to twenty-three (23). Furthermore, the licenses of three hundred and forty seven (347) microfinance businesses have been revoked.
The above notwithstanding, I am glad to inform members that the University of Ghana Cooperative Credit Union is still strong and resilient due to cautious operating practices. For example we have adopted formal and informal systems and processes to detect early warning signs of losses, incorporating corrective measures into business processes, and integrating risk management into our functional activities to guarantee the safety of members’ economic resources.
The Board, on assumption of office, continued the aggressive efforts of the previous Board to recover funds invested in some institutions suspected to have been experiencing challenges. This undertaking has yielded tremendous results. The major outstanding difficulty has been the investment in Gold Coast Fund Management Ltd. The Board is exploring all formal and informal approaches and not relenting in its pursuit to recover the funds from this company.
Strategic Direction
In our efforts to make the University of Ghana Cooperative Credit Union memberfocused, cost efficient and cost effective, the current Board envisions to build organisational capacity. This is to increase focus on strategy and results, and improve organisational performance by measuring what matters. The Board also seeks to align the work staff do on a day-to-day basis with strategy, focus on the drivers of future performance, and improve communication of the Credit Union’s Vision and Strategy. The Board has, therefore, adopted the Balanced Scorecard (BSC) Systems, an integrated strategic planning and performance management system which engenders, among others, organisational development, change management and communications planning, strategic planning, objective and strategy mapping, performance measures and target setting, strategic initiative prioritization, automation, cascading and strategic management.
Specifically, the BSC is to align the Credit Union, communicate with clarity the vision, mission, core values and strategy, help current and future leaders of our Credit Union drive organisational transformation, provide a disciplined and professional working environment, improve performance through measurement, support decision-making and contribute towards the growth of the Credit Union while minimizing expenses. Indeed, the system will enhance the internal processes and activities of the Union in the areas of deposits, withdrawals, member recruitment, safety of investments, online access, safe electronic banking platforms, commencement of salary accounts, quality member services and engagement, and ultimately maximize the economic and social welfare of members.
Governance and Corporate Social Responsibilities (CSR)
The growth of the Union and changes in the financial landscape in Ghana has necessitated several reforms in the Credit Union. Notable among them is the review of our bye-laws to ensure that we do not operate outside the remit of the law governing co-operatives. Due to this, the Board has set up a Committee to consultatively make proposals to be laid before members, hopefully at the next Annual General Meeting for amendment. We ask members to submit proposals for consideration in the review process.
In addition to the existing Committees, such as the Supervisory Committee and Loans Committee playing their roles as specified in our bye-laws, the current Board has created other Sub-Committees to monitor and advise the Board on issues relating to Finance, Investment and Risk Management, Information Technology and Cyber Security, Member Care, Facilities and Assets Management, Administration and Human Resource Management.
During the year under review, the Union has not reneged on its corporate social responsibility. Upon request, and as the largest Credit Union in Ghana, the Union contributed towards the African Confederation of Co-operative Savings and Credit Association (ACCOSCA) conference held in Ghana in October 2018. Also, a photocopier was donated to the Department of Co-operatives. In view of the many requests to the Union due to its position in Ghana and on the continent, the current Board is seriously considering making CSR a strategic endeavour and not a mere donation channel.
Performance
Considering the turbulence in the investment market, the Board was generally conservative in its decisions; so, gains made were modest compared to those of the previous years. As a result, our total income increased from GH¢18,560,162 to GH¢ 20,476,335 representing 10%. The cost of funds amounted to GH¢ 8,320,486 compared to GH¢7,910,832, which shows an increment of 5% at the end of June 2019.
Our Total Assets increased from GH¢102,541,409 to GH¢125,740,820, an upsurge of 23%. Savings Deposit grew from GH¢ 64,078,074 to GH¢ 74,884,870, representing a 17% increase. The Union has a reserve of GH¢ 25,193,652 which is 20 % of total assets prior to dividend payment. Member shares increased from GH¢16,470,952 to GH¢ 23,972,778.
The proposed dividend, if approved, will reduce the reserve level from 20.03% to 16.70% of total assets. Subject to the approval at this Annual General Meeting, Management will declare 48% of net surplus, amounting to GH¢ 4,192,356.06. The payment will result in GH¢ 0.17 earnings per every GH¢1.00 shares held.
The membership of the Union has increased from 7,214 to 7,904 by the close of June 30, 2019.