Weak Governance, Loan Delinquency Threaten Future of Cooperative Credit Unions, Says Prof John Gatsi
Professor John Gatsi, Dean of the University of Cape Coast Business School, has warned that Cooperative Credit Unions face significant threats to their sustainability in the 21st century, citing weak governance, loan delinquencies among directors, low membership rates, and inadequate oversight as critical challenges.
Delivering the keynote address at the 50th Anniversary and 38th Annual General Meeting of the Oguaa Teachers Cooperative Credit Union, Professor Gatsi underscored the need for urgent reforms to safeguard the sector’s future.
Prof Gatsi highlighted the importance of disciplined governance, noting that directors should make decisions solely in the interests of their unions and that any director with delinquent loans should be removed, in line with the World Council of Credit Unions’ model law.
He further stressed the need to boost membership and financial literacy while adopting modern technology and enhancing supervision to ensure long-term viability.
Referencing a recent report by the Bank of Ghana on rising fraud within the banking sector, Prof Gatsi called on Credit Unions to improve recruitment processes and tighten staff oversight, with a focus on integrity and commitment, asserting that while Information Technology skills are essential, he warned that inadequate attention to staff behaviour could heighten risk exposure.
Amid rising income inequality and economic volatility, Prof Gatsi urged Credit Unions to deploy sound management strategies to protect members’ savings and improve access to credit. He emphasised that Credit Unions play a vital role in addressing financial exclusion and poverty and must prioritise sustainability across governance, financial, and mission-driven metrics.
Prof Gatsi also praised the Oguaa Teachers Cooperative Credit Union for its 50 years of service, contributing to financial inclusion and providing critical credit access.
Concluding his remarks, he called for continued reinvestment, cost control, and operational efficiency, affirming that these measures would ensure the long-term sustainability of Credit Unions in an increasingly challenging financial landscape.
“I thank you for the work you have done over the years in managing the credit union to this point. Over the years, you have helped members access credit to support their livelihoods. You have played a critical role in ensuring modest financial inclusion,” he said.
