Bayport Financial Services: Overview of the Savings and Loan Sector in Ghana

Nii Amankra Kwashie Tetteh, Managing Director of Bayport Financial Services, gives an overview of the savings and loan sector in Ghana.

“The savings and loan sector is a step below the universal bank sector. It is very competitive. We currently have about 38 savings and loan companies and below that, you have all the many finance houses, microfinance companies, etc. But the savings and loan spaces became the place, at least prior to all the reforms and all the challenges we have had in the last two years, where Ghanaians come to for high investment returns and where most of SME Ghana comes to for support in driving their business on a day to day basis. It is quite competitive. In the past few years, the focus has been on how to deliver services more digitally, being more professional. Many of the companies are looking at partnerships to enrich their offerings. But the focus has always been largely SME geared. If you take most of the lending assets, you will find a very strong SME presence within the savings and loan sector. We flip that and are more in the payroll sector. That is the bulk of our business, but we also do some SME as well through specific products that we promote in the market. The savings and loan space is largely investments and lending assets. We are seeing a number of these businesses also begin to look at other products from money transfer services, insurance, we are also seeing quite a number of them coming up with a whole range of lending products more tailored to the Ghanaian businessman and woman. With the reforms, we have seen quite a lot of challenges because of the exposure to the SME space. But that continues to be a very vital area and speaks to many of the challenges that happen in that sector. It will continue to be a very important sector going forward because of that focus on the SME space. If you look at the savings and loan companies, they are a very vital bridge between main street banking and being at the forefront of that financial inclusion journey for the financial services in Ghana”, says Nii Amankra Kwashie Tetteh.

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