...LONDON SCHOOL OF BUSINESS AND FINANCE CREDIT RISK MANAGEMENT OF NON-BANKING FINANCIAL INSTITTUTION IN GHANA (A CASE STUDY OF TF FINANCIAL SERVICES) BY STEPHEN KWADWO NTIRI A Thesis Submitted to the London School of Business and Finance in Partial Fulfilment of the Requirement for the MBA Degree in Financial Services MARCH 2010 DECLARATION I Stephen Kwadwo Ntiri hereby declare that except for references to other people’s work, which have duly been acknowledged, the work presented here was carried out by me, MBA student of Financial Servies at the London School of Business and Finance (LSBF), under the supervision of Randolph Metz-Johnson. I also declare that this work has never been submitted partially or wholly to any other institution for the award of a certificate. …………………………………………… ……………... Stephen Kwadwo Ntiri Date (Student) ………………………………………… …………… Randolph Metz-Johnson Date (Supervisor) Dedication This research project is dedicated to Almighty God for His abundant blessings and protection given me throughout this study, and also to my family for the support I received from them. Acknowledgement I am most grateful to Almighty God who through His infinite mercy and love guided me throughout the duration of the programme. I wish to acknowledge the help and encouragement I got from the entire staff of TF Financial Services, especially Mr. Benjamin Turkson, which has enabled me to complete this work. I also want to thank my wife, Esther Yamoaba...
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...CHAPTER ONE INTRODUCTION 1.1 Background Banking reached colonial Africa through the activities of colonial merchants, and the first bank in West Africa was established in 1894, that is the British Bank for West Africa (BBWA), which extended its operations to Ghana soon after in 1896. In Ghana, the Bank of Ghana is responsible for the banking sector. The Bank of Ghana was established in 1957 to oversee the health of the nation’s financial sector. Presently the Bank of Ghana is empowered by the banking act of 2004, Act 673 (amended in 2007) and the Bank of Ghana Act 2002, Act 612 to regulate banks in Ghana. The mission of the central bank is “to pursue sound monetary and financial policies aimed at price stability and create an enabling environment for sustainable economic growth.” In maintaining a stable banking industry, the Bank of Ghana ensures that banks playing a part in the pursuit of its goals are well leveraged to withstand any unforeseen circumstances. One way the central bank does this is to ensure that banks have capital adequacy to a certain level through the regulation of the minimum capital requirement. The issue of the minimum capital requirement, its increases and implications has always been an issue of hot debates amongst economists, and even politicians. The minimum capital requirement is the minimum level of security below which the amount of financial resources should not fall (European Parliament legislative resolution of 22 April...
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...and Petroleum (MoEP) . The energy sector functions under three main sub-sectors; the power (hydro and thermal), petroleum and the renewable energy sub-sectors. In addition to the sub sectors, there are Regulatory agencies that also exist to provide licensing for upstream and downstream operations within the sector. The Regulatory agencies ensure that equipment’s and technology employed to provide energy efficiency and improved access are up to standard and of quality. The Ghana Standards Authority, functions in complimentary manner the Ministry by developing standards for both imported and locally produced energy equipment. The Power sub-sector has multiple bodies such as Volta River Authority (VRA), Independent Power Producers (IPPs), Ghana Grid Company (GRID Co), Electricity Company of Ghana (ECG), Northern Electricity Distribution Company (NEDCo), and Enclave Power Company (EPC); they are in charge of power generation, transmission and distribution. The Petroleum sub-sector also has bodies such as Ghana National Petroleum Corporation (GNPC), Tema Oil Refinery and the Bulk Distribution Companies; they are in charge of production, refining, transportation and distribution of oil products. There are five key bodies in the Regulatory agencies: Power and Utility Regulatory Commission (PURC), Energy Commission (EC), National Petroleum Authority (NPA), Petroleum Commission and Environmental Protection Agency (EPA). In addition to others, their combined operations include approval...
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...FACES OF INDEBTNESS 1) KENYA Kenyan borrowers promptly repay their loans despite the stiff interest rates and high inflation, presenting a lower default risk investment environment for banks compared to other parts of the world. The low default risk for banks has however not translated to lower interest rates for customers despite the credit referencing system taking effect. The credit risk is measured in terms of gross non-performing advances as a percentage of the total gross advances. A survey by audit firm RSM Ashvir, based on banks 2012 financial reports showed only 4.6 per cent of loans by banks in 2011 ended up as non-performing advances. The banking industry disbursed Sh1, 335 billion, out of which only Sh61.4 million was defaulted. The risk has consistently decreased from 7.9 per cent in 2009 to 6.3 per cent in 2010. With the increase in interest rates and inflation rate, non-performing advances were expected to go higher, but it is not the case. This shows that the risk in the Kenyan market is low Interest rates spiked in December 2011 after the Central bank increased its key lending rate to a high of 18 per cent to curb the inflation rate which had peaked at 19.72 per cent in November that year. Though both the Central Bank Rate and inflation rate have dropped to 9.5 per cent and 4.11 per cent, banks are still lending at an average of 17.84 per cent. Microfinance institutions in Kenya have suffered significant loan repayment default resulting into subsequently...
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...existing literatures on customer service in the banking industry of Ghana. This chapter takes a look at the various variables that may influence important customer service amid fierce competition from the perspective of some writers and researchers. It starts with profile of the banking industry under study through to the importance and nature of the customer practices, Customer Satisfaction, Retention and Customer Loyalty, Customer Relationship Building and its practical implications for the study. THE BANKING INDUSTRY During the past decade, the financial sector in Ghana has undergone major changes mainly through the financial sector structural adjustment programme as part of the economic recovery programme. Moreover, globalisation, mergers and acquisitions, and the emergence of new technologies have contributed dramatically to stiffer competition and pressures on profitability (Amoako 2012) Before the 1950s, the number of bank accounts in Ghana was very few and what mattered most was the personal contact between the Bank Manager and his customers. There was hardly any urgent demand for information because of the low volumes of transactions. This made it possible to satisfy customers with manually kept records. Thus the majority of banking services were performed using manual operations and personal contact with customers without much information transfer and handling of customer data. As commercial activities increased and people developed more banking awareness, the...
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... Sumani John Bosco (Supervisor) Date…………………….. DEDICATION This work is dedicated to the parents and relatives of the group members for their love, care, prayers and support. ACKNOWLEDGEMENT The group wishes to render its first thanks to the Almighty God without whose divine intervention the work would not have been possible. We also acknowledge the immense contribution of the chiefs, elders and people of Zanko and Sokpayiri communities who contributed in diverse ways to making our research a successful one. The group also likes to acknowledge the various contributions by Zoom lion Ghana Ltd, Environmental Protection Agency (EPA) and the Wa Municipal Assembly for making available relevant information pertaining to the project. We are very much grateful to Mr.Sumani John Bosco who supervised this work. We sincerely appreciate his advice, directions, suggestions made towards this work. We are also very thankful...
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...ANALYSIS OF SUPPLY CHAIN RISK MANAGEMENT IN THE GHANAIAN MANUFACTURING INDUSTRY: A CASE STUDY OF KAMA PHARMACEUTICAL MANUFACTURING COMPANY INTRODUCTION 1.0 Background of the Study According to Hendricks and Singhal (2005), there is increased awareness and recognition among managers, consultants and academicians that supply chain performance is increasingly important to business success. In other words, supply chain plays an important strategic role in the world economy and that firms are more dependent upon their supply chains networks in order to deliver value. Regrettably, there is also a point of vulnerability in the world economy which are subject to disruptions with significant consequences especially when the disruption comes suddenly, without warning, and with devastation. Handfield (2007) posit that the total set of risks to an organization is much broader. It includes hazard risk and operational risk. Hazard risks refer to weather disasters, equipment shutdown, or product liability, while operational risks include major disruptions such as theft, late supplier deliveries, and IT systems shutdowns and so on. For the purpose of this study, focus shall be placed on operational risk with specific focus on supply chain risk. Generally, supply chain operation is fundamental to the success of any organization. It is critical to a company’s ability to manage global operations, supply and demand volatility, the accelerated pace of new product and services introductions...
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...INTRODUCTION Background of the study Ghana’s experience with macro-stabilization and structural adjustment appears to be in line with that of many other developing countries that have pursued similar policies. Their experience reveals that such programs do not lead automatically to the resumption of growth, let alone ensure the transition onto a higher growth path. The recent experience of transition economies has shown that price stabilization and opening up may not be enough to achieve a rise in the trend rates of investment and growth. Recognizing this evidence, policy emphasis has shifted to pinpointing complementary policies that will lead an economy from stabilization to growth. The policy debate today focuses on reforms. Ghana immediately after independence made tremendous effort towards achieving full employment and socio economic development through public investment in medium and large scale enterprises. Notwithstanding the direct involvement and the effort of the government, the sector is saddled with a lot of constraints, including scarce capital, intensive technology, foreign exchange constraints, poor management, corruption and inadequate attention to economic viability and market prospects which has resulted in poor performance of the industries in terms of output and employment (Steel & Webster, 1992). Following an economic recession in the 1980’s which resulted in the retrenchment of workers from the civil service, the rationalization of production...
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...FINANCING SMALL SCALE BUSINESSES IN TAMALE TERMINOLOGIES 1. CAPITAL: Wealth owned by a Company in the form of money, stock or funds which is to be used for the creation of additional wealth. 2. DISCOUNT: A reduction made in the cost of buying items in bulk or for prompt payment. 3. EMPLOYEE: A person or someone who is paid regularly to work for a person or Organization 4. ENTERPRENEUR: A person who on his own account and initiative, makes the policy of a business and undertakes the financial risk. 5. INTEREST RATE: The specific sum of money which has to be paid for money borrowed. 6. NET ASSETS: The value of the resources of a company after deducting all liabilities 7. SHAREHOLDERS’ WORTH: The total assets of a business that belong to shareholders. It thus includes the value of all assets minus all liabilities. 8. PLOUGHED BACK PROFIT: To re-invest earnings in the business in order to develop or expand it. Table of Contents Page Declaration i Certification ii Dedication iii Acknowledgement iv Abstract v Terminologies vi Table of Contents vii CHAPTER ONE 1.1 Background of study 1 1.2 Statement of the Problem 5 1.3 Objective of the study 5 1.4 Significance of the study 6 1.5 Scope of the study 6 1.6 Methodology 6 1.7 Limitation 7 1.8 Chapter organization 7 CHAPTER TWO 2.1 Introduction...
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...Decker sdecker@hbs.edu Abstract The colonial legacy in Africa has determined the development of management on the continent, as the comparison between the historical case of Africanisation in Ghana and Nigeria in the 1950s, 1960s and 1970s with South Africa in the 1990s and 2000s highlights. Despite the fact that Ghana and Nigeria were not settler colonies, when white managers were replaced with blacks (who previously only occupied subordinate positions in the colonial or Apartheid systems), most companies in Africa faced similar problems. In the quest for legitimacy in the eyes of local elites and the international community companies were tempted to resort to ineffectual window-dressing, or failed to develop the talent of black staff who face disapproval not only from white but also from less successful black colleagues. In case of successful promotion of black managers, skilled white personnel was often driven away by the lack of opportunities, while capable black staff was frequently poached with better offers by competitors. The creation of a black elite with significantly higher income than the majority population was also frequently divisive and undermined corporate social responsibility claims. Keywords: Black Economic Empowerment, Affirmative Action, Africanisation, South Africa, Ghana, Nigeria Black Economic Empowerment (BEE) and Employment Equity in South Africa are rarely seen in comparison to developments in this field in other African countries. Jackson (2004: 251...
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...REPUBLIC OF GHANA THE BUDGET STATEMENT AND ECONOMIC POLICY of the GOVERNMENT OF GHANA for the 2015 FINANCIAL YEAR presented to PARLIAMENT on WEDNESDAY, 19TH NOVEMBER 2014 by SETH E. TERKPER Minister for Finance on the Authority of HIS EXCELLENCY PRESIDENT JOHN DRAMANI MAHAMA Theme: “Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy ’’ THE 2015 BUDGET STATEMENT AND ECONOMIC POLICY ~ ii ~ Theme: “Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy ’’ For copies of the Statement, please contact the Public Relations Office of the Ministry: Ministry of Finance Public Relations Office New Building, Ground Floor, Room 001/003 P. O. Box MB 40 Accra – Ghana The 2015 Budget Statement and Economic Policy of the Government of Ghana is also available on the internet at: www.mofep.gov.gh ~ iii ~ Theme: “Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy ’’ ACRONYMS AND ABBREVIATIONS ABFA ACLP ADR AFCON AfDB AIDS AML AMSECs APR ATMA AVIC BACs BDS BIEPC BoG BOP bopd bps BR BRICS BSPs BVDs Annual Budget Funding Amount Ascertainment and Codification of Customary Law Project Alternative Dispute Resolution African Cup of Nations African Development Bank Acquired Immune Deficiency Syndrome Anti-Money laundering Agricultural Mechanization Services Enterprise Centres Annual Progress Report Accra-Tema Metropolitan Area Accra Visitor Information Centre Business Advisory Centres...
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...DEPARTMENT OF ECONOMICS UNIVERSITY OF GHANA COMPARATIVE ANALYSIS OF THE PERFORMANCE OF MUTUAL FUNDS IN GHANA BY WISDOM KWASHIE AFORNORPE A DISSERTATION SUBMITTED TO THE DEPARTMENT OF ECONOMICS, UNIVERSITY OF GHANA, LEGON, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF ARTS DEGREE IN ECONOMIC POLICY MANAGEMENT OCTOBER, 2008 DECLARATION I, Wisdom Kwashie Afornorpe, author of this Master of Arts dissertation do hereby declare that, except for references to other people’s works which have been duly acknowledged, the work presented here titled “Comparative Analysis of the Performance of Mutual Funds in Ghana” was done entirely by me. This work has never been presented in whole or in part for any other degree in this University or elsewhere. …..…………………………… Wisdom Kwashie Afornorpe (Student) ……. ………………..…… Mr. Frank Agyire-Tettey (Supervisor) ...
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...a foreign country for trade or sale. (Branch, Alan E. Elements of Export Marketing and Management. Chapman and Hall, 1990). International business is a potentially lucrative area of many businesses, but the small business owner should be aware that establishing one self in a foreign market is a complex, and time consuming task. Many small businesses in Ghana have dramatically improved their financial fortunes by pursuing export opportunities, but the vast majority of enterprises that have been successful in this regard did not enter the world of international trade until they had fully researched both their own exporting capabilities in various business conditions in the target market(s) abroad indeed, they are wide range of factors to consider when assessing a company’s readiness to expand its business these include company export readiness, potential foreign markets, product distribution options, legal factors, operating cost and profit margin, financing resources. There are many good reasons why countries export. And these includes gaining economies of scale, increased revenue and profit, increased productivity ,spread risk base of business ,smoothing effect on order book ,Offset lack of demand for seasonal products ,New product ideas and Additional markets. Just because exporting is a good idea, a firm or a country should not jump into it unless: * It is has an export plan * The company is ready to export * It has done market research Exporting is sometimes...
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...ASSESSING THE CHALLENGES OF TAX REVENEUE MOBILISATION IN GHANA: A CASE OF SUNYANI MUNICIPALITY. By EGYIN, KODWO BOAKYE (PG 2043808) A Thesis submitted to the Institute Of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of COMMONWEALTH EXECUTIVE MASTERS OF BUSINESS ADMINISTRATION JUNE, 2011 1 DECLARATION I hereby declare that this submission is my own work towards the CEMBA and that, to the best of my knowledge, it contains no material previously published by another person nor material which has been accepted for the award of any other degree of the University, except where due acknowledgement has been made in the text. Kodwo Boakye Egyin Student Name ................................... Signature .............................. Date Certified by: Mr. Jones Lewis Arthur Supervisor ................................... Signature .............................. Date Certified by: Professor Isaac Dontwi Dean ................................... Signature .............................. Date 2 DEDICATION I dedicate this work first to the Almighty God who has brought me this far, to my father, Kwamina Akwaa Egyin, who mentored me through my education, my loving wife, Yvonne, my sweet kids, Papa Akwaa, Araba and Kurankwesi who stayed by my side all along. 3 ACKNOWLEDGEMENT I am most grateful to the Almighty God for His protection throughout the course and seeing to a successful end. My special...
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...THE CREDIT POLICY The credit policy of Ghana Commercial Bank Ltd is aimed at maintaining acceptable credit standards by holding reasonable risk limits, evaluating new business opportunities, complying with regulatory requirements and providing adequate liquidity for the effective running of the bank. This aim is achieved through the following objectives: 1. Attract and maintain a High Quality Portfolio of Assets 2. Efficiently manage its assets to ensure liquidity 3. Finance the needs of Corporate, medium and small scale as well as individual clients. 4. Join syndicates with other banks and financial institutions. The importance of these objectives is to ensure that clients who borrow from the bank have the ability to repay the funds they borrow on schedule and with interest. Businesses that borrow from the bank should demonstrate an ability to repay from their current and future net cash flows of the business. Individual client's repayments depend also on their personal cash inflows basically being their salaries. Another importance is the need to avoid bad debt as much as possible by not giving credit to clients who are likely to be unable to repay due to their peculiar circumstances. Also the bank must ensure that at all times it is able to meet its obligations to depositors since its stock in trade is money. This it does by diversifying loans it has given (assets) to have a wide array of maturity profiles. Also it ensures that its assets are properly matched...
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