##¢6, 548. 63 million a year earlier. 8. mr. chairman, despite the growth in total assets, some s & l companies continue to be faced with poor asset quality, solvency and liquidity challenges. indeed, as regulators, we have observed some worrying trends which require the attention of all stakeholders. in addition to liquidity and solvency issues, several financial soundness indicators of the industry have adversely deviated from accepted statutory and prudential benchmarks. these outcomes are primarily due to the business models adopted by some ( not all ) s & ls, by essentially attracting term - deposit funding at unsustainably - high costs and deploying such funding into risky assets without adequate risk management systems to manage and monitor the inherent risk exposures. poor credit underwriting practices, poor loan recoveries, insider dealings and related party transactions, weak governance and concentration in ownership structures among others, have all contributed to the capital illiquidity and solvency challenges in the s & l sector. 9. what is more, some institutions within the s & l sub - sector shifted from financing the lower - tier retail end of the market towards financing the wholesale end, or simply placing funds with other s & ls. these practices have increased concentration risks in the sector, which impact negatively on financial stability. 10. given these challenges in the sector, i must commend the ghasalc for spearheading efforts to re - evaluate and realign the business models of its member institutions, at this annual general meeting. this will help improve to reposition the sector and regain the trust and confidence of the public. 11. i urge the executives of this association to continue to lead the process of reengineering this sector, and in so doing, to help to refocus the business models of its members towards realigning themselves with the policy objective of financial inclusion for which savings and loans licences were issued. i would also urge you to collectively work towards finding the balance between profit - making and protection of depositor funds, underpinned by strong corporate governance, prudent business practices, and high ethical standards. investments in appropriate technology and good human resources are also critical to helping the sector reposition itself to drive financial inclusion, improve efficiency and lower transaction costs for s & ls and their customers. 12. ladies and gentlemen, it is only such steps are taken that we can expect to see a sustainable savings and loans sector,

examples of failed businesses, such as the medici bank that collapsed in italy in 1494, the failure of over a thousand savings and loans companies in the united states in the 1980s and 1990s, the failure of the bank of credit and commerce international in 1991, barings bank in 1995, and more recent banking failures in the u. s, the eu, and nigeria, were all associated with poor corporate governance and a culture of weak regulatory compliance. for financial institutions especially, trust and confidence are critical and once lost, business sustainability becomes difficult. as the saying goes, trust comes on foot but bolts on horseback. 4. the focus of this agm on building sustainable businesses, is therefore timely. now is a good time to assess the current state of the savings and loans ( s & l ) subsector, with the view to building sustainable business models to the benefit of all stakeholders and the broader economy. 5. ladies and gentlemen, as i said earlier, financial intermediation is central to economic growth and poverty alleviation. this intermediation role is played by both the banking sector and other savings and deposit taking institutions in the economy. within our financial sector, s & l companies and other lowertier financial services companies are expected to provide financial access to the rather large informal sector which is mostly characterized by the unbanked and underserved population. financial access to this segment of the society not only helps in improving livelihoods, but also contributes positively to the sustainable development of the country. 6. within the ghanaian context, therefore, the potential role of s & ls in financial intermediation cannot be overemphasized. it is however important to note that intermediation thrives on trust and confidence in the financial system. the security of funds entrusted to all financial institutions demands that they are governed and managed in a sound and prudent manner to preserve the confidence of depositors and investors. this also implies that all deposit taking institutions must adhere to good corporate governance practices and build strong risk management systems to safeguard the stability of the financial sector. 7. mr. chairman, ghana ’ s savings and loans sub - sector is made up of some 39 companies as at the end of march 2019, and dominates the specialised deposit - taking institutions ( sdi ) sector, accounting for 44. 6 percent of total sdi assets. in march 2019, total assets of the sector increased to gh¢7, 977. 63 million, up from gh