As if that is not enough warning to Ghanaians today some market women, artisans and office workers are again falling victim to another set of financial groups that include Nkoranza based DKM micro Financial Company and some others that are using the same diabolic methods used by Pyram and R 5 in the past.

wpid-bog2.jpgTo some observers those who were ripped off while chasing big interest rates in the finance schemes were greedy. However another school of thought feels that the Bank of Ghana which is responsible for regulating banks and microfinance companies was not alive to its responsibilities. According to them the BOG did not live up to their responsibility of safeguarding the interest of the customers of the banks and non bank financial companies.

So after being ripped off the aggrieved people took the law in their hands by organizing demonstrations against the DKM and the other companies and occupying their offices in Brong Ahafo and northern regions where they operate for some days. It is therefore gratifying to learn that the central bank has now begun taking steps to assess properly the background of new and some existing companies and individuals wishing to operate as micro finance companies or money lending firms. As a result of that The Central Bank says it has revoked the probationary endorsement or ‘approval in principle’ of some 70 microfinance institutions and a money lending company which applied for banking licenses recently.

A notice to banks, financial institutions and the general public dated 31st December, 2015, signed by Caroline Otoo, Secretary of BoG and issued in Accra, said applicants are granted ‘approval in principle’ for a defined period usually six months and are required to meet conditions stated under the ‘approval in principle’ letter.

The affected institutions include Cedar House Microfinance Services Limited, Ezi Access Microfinance Limited, KB Star Microfinance Company Limited, Money Link Microfinance Limited, Xpress Link Microfinance Company Limited, Quick Loans Microfinance Limited, Vanliz Microfinance Services Limited, Glow Microfinance Limited, Sufficiency Microfinance Limited and Apex Microfinance Limited.

Others include Atwiman Microfinance Company Limited, Genesis Seed Microfinance Limited, Look-Ahead Microfinance Limited, Silison Microfinance Limited, Softbiz Microfinance Limited, Growth Champions Microfinance Limited, Money Home Microfinance Limited, Reach Microfinance Limited, Sika Dwa Microfinance Limited, TTS Microfinance Services Limited and a host of others.

The money lending institution affected by the announcement is Growth Pole Money Lending Limited

Though the Central Bank did not specify the actual conditions which the affected institutions failed to meet, it noted that “some microfinance and money lending companies, despite several reminders, including our Notice No BG/GOV/SEC/2015/10 of 15th July, 2015, have failed to meet the conditions precedent to the issuance of a final license.”

“The Bank of Ghana therefore wishes to inform all banks, non-bank financial institutions and the general public that the ‘approval in principle’ granted to the under-listed institutions is hereby revoked.”

Although the reasons given for the removal of the affected financial institutions from the list of the Bank of Ghana has been given the measure taken to sanitize small scale banking in Ghana must not end there. Steps must be taken by the Bank of Ghana to ensure that the affected banks do not operate secretly within their areas of operation illegally.

To achieve their aim it is advisable for a committee be established to go round to talk to people especially market women and men on the operations of Susu and micro finance companies operating illegally in towns and villages across Ghana. The same committee can go to the extent to check on the modus operandi of the registered Susu companies and some banks especially on levies and charges to find out whether their activities conform to the rules governing banking, Susu and micro finance companies acts rules and regulations.

This way all the loopholes used by the operators of Susu and non bank financial companies would be plugged to end frauds in small scale banking in the country.

Source: Alhaji Alhasan Abdulai


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