In an exclusive interview, Who’s Who Legal speaks with Alexander Asamoah, head of legal at IFS Financial Services headquartered in Accra, about his role within the firm and the Ghanaian legal market.
"The good firms are known and are selling themselves very well. There is also a surge of new, young, vibrant firms who are eager to make a good name for themselves."
Name: Alexander Asamoah
Position: Head of Legal
Company: IFS Financial Services
Number of employees: 63
IFS Financial Services (IFS) is a non-bank financial institution that provides short-term finance and flexible leasing solutions to small and large organisations. Headquartered in Accra, IFS aims to support entrepreneurship in Ghana by tackling lengthy process in procuring finance for start-up businesses in the country.
Incorporated and licensed by the Central Bank of Ghana in 2007, IFS now operates with a team of 63 staff including banking specialists; investment specialists; equity, fixed income and mutual fund research analysts; financial and estate planning consultants; and insurance consultants.
Its specialist products include SME financing, home completion loans, church growth loans and school expansion loans.
Most recently, the firm launched IFS Capital Management; an asset management subsidiary company which is regulated by the Securities and Exchange Commission of Ghana.
Who’s Who Legal spoke to Alexander Asamoah, head of legal at IFS. Asamoah joined the group in March 2012 and previously worked for Expresso Telecom as an assistant manager in the legal and regulatory department.
Tell us about your role:
I am the head of legal at IFS. I handle all the legal and secretarial duties for the company including loan advice, assessing the suitability for proposed collateral and legal recoveries, and I draft all legal agreements and letters. On a typical day, I prepare for court in the morning by doing as much research as possible. I usually arrive back by 12 noon and from then I continue with all other in-house duties. I am also the head of legal for our subsidiary group Capital Management, which mainly deals with investment advisory, asset management and pension fund management services.
Tell us about any recent special projects you have been working on recently.
At present we are following up on our core business offerings. We have a few arrangements with other financial institutions to dispose of properties we have mutual interests in as part of our recovery processes.
Which law firms have you previously appointed for special projects?
AB Lexmall & Associates, Minkah Premo & Co, Lawfields Consulting, GRM Law Consult, George Sarpong & Co and Akyianu & Associates.
Do you tend to use the same law firms?
What criteria do you use when deciding which firms/lawyers to instruct in relation to a legal issue?
In Ghana we don’t really have firms that specialise in one particular area of law only. But the firms that I mentioned all have strong expertise in debt recovery. We also choose our lawyers based on personal contacts – (based on links and contacts made when I was in private practice). We also look at the firm in general paying attention to the number of lawyers they have. Some firms only have one or two lawyers and if cases fall through, our interests may not be protected if the firm is quite small. We particularly look for experience and reliability in dealing with firms.
What is the greatest challenge – legal, practical or political – facing the finance industry in Ghana?
Well, in the legal arena there are so many challenges with courtroom recovery not only pertaining to finance. It’s a very lengthy process overall.
Regarding the financial industry, judges are not really receptive to interest rates that are quite high. What a lot of them don’t realise is that the money we lend, we also have to borrow. It is difficult for judges to appreciate the measures we go through to gain finance.
To make the process shorter and less expensive in terms of time and money, the Borrowers and Lenders Act was passed in 2008 to aid the financial services industry. However, there are still challenges with the full implementation of the Act. The Act empowers financial institutions to realise collateral without going to court. The Act also establishes a collateral registry for all properties used to secure financial facilities. When there is a default, the lender then notifies the registrar of its intention to realise the security. The registrar is supposed to issue a certificate to that effect enabling the lender to realise the security either by itself (peaceably) or through the assistance of the police. However, there are challenges with obtaining this certificate. Obtaining detailed search reports on the collateral registered is also a challenge. Previously, search reports contained all details required for clarity if the lender decides to go to court. The law also requires a lender, if it cannot realise the security peaceably, to go to court for a warrant to possess the security. This is also difficult because some of the judges would require you to give notice of this intent to the borrower, giving the borrower the opportunity to dispose of the property and complicate matters.
I must add that the Bank of Ghana is currently reviewing the Act to make it more practical and fully operational.
In the finance industry, is the legal marketplace very competitive?
The legal industry is very competitive. People are always on the ready to offer you a discounted rate. I get proposals almost every week – and even when I tell them what others are offering, some are ready to bring their prices even lower. The good firms are known and are selling themselves very well. There is also a surge of new young, vibrant firms who are eager to make a good name for themselves.
Are there any recent regulatory changes or cases in the sector in Ghana that have caught your attention?
One of the biggest changes not so long ago was the Bank of Ghana’s directive that raised the minimum capital for second tier finance to seven million cedis. This was a bit of a challenge and a lot of financial institutions struggled to meet this.