Delay in payment of contractors is affecting local economy
Many contractors who took loans from WACCU to execute government projects have not been able to repay their loans- a situation which is affecting the financial viability of many businesses including the Union.
Naa Bawa Seidu, Board Chairman of WACCU, said this at the annual general meeting of the Union in Wa.
He said the delay has affected the poor loan quality of the Wa Community Co-operative Credit Union, which caused a loan loss provisioning of GH¢142,000.
Other factors, he said, which also contributed to the poor loan recovery processes of the WACCU included the inability of some members with asset finance loans to pay up.
Naa Bawa Seidu said some businesses also stagnated due to the escalating cost of business and shrinking demand for their products and services which created artificial financial shortages, resulting delay in the repayment of loans to the Union.
The Board Chairman said net surplus of the WACCU decreased marginally from GH¢205,000 in 2015 financial year to GH¢200,184.68.
He said the Board had also revised the budget in January 2016 following changes in many economic variables, reviewing targeted surplus level of GH¢900,000 down to GH¢210,000 and 95 per cent of it was achieved.
Naa Seidu said the budget revision was caused by hikes in utilities and petroleum products together with a deteriorating portfolio quality as many members failed to repay the loans granted them within expected schedule.
He said the WACCU’s total income was GH¢2,438,789.27 while total expenditure stood at GH¢2,22,386.59 as at June 2016, representing 96 percent and 97 percent of revised budgeted levels respectively.
“Compared with the 2015 financial year figures of GH¢1,700,000 and GH¢1,500,000, one can say that the WACCU is gradually moving forward.
“The Union is now counted among large credit unions under (CUA’S) classification of credit unions with total asset of 11,700,000 Ghana cedi compare with GH¢9,600,000 last year”, he said.
This represent a growth rate of 22 per cent over the period and the growth was mainly influenced by increase in member saving and shares deposits after the demise of many self-style investment houses.
Naa Seidu said the total membership of the Union was 14,775 compared with 13,779 last year, resulting in a growth rate of seven percent.
But there is a decline in the number of paid up members which stood at 3,172 as at June 2016, representing 21 percent of total membership.
Naa Seidu said the Union’s share value increased from GH¢645,000 last year to GH¢1,449818.97, indicating a rate of 125 percent.
He said savings deposits increased from GH¢7,100,000 in 2015 to GH¢8,600,000 representing 21 growth over the previous year.