He said, the move  if adopted, will help check the unrealistic interest rates being used to entice unsuspecting customers who have very little knowledge of the operations in the industry.

wpid-Dr-Ekwow-Spio-Gabrah.jpgDr Gabrah was commenting on the recent financial scandals that rocked micro finance industry.

“We went to them before this crisis of 70 micro finance institutions being closed down to talk about the high cost of credit and therefore the high interest rate.

He said, “I am only saying here that many of the micro finance institutions, even those that have not been banned, the ones that are still in operation today … claim they can offer high interest to savers because they also are allowed to charge high interest to borrowers and until you bring a cap on interest rate that micro finance institutions or any financial institutions can lend at any percentage they want.”

According to him, putting a cap on interest rates will also cure the high interest rate regime Ghana is faced with.

He averred that the high interest rate situation is stifling the growth of businesses in teh country and as such, a lot is needed to be done to save the situation.

Dr. Spio-Garbrah said, until stringent regulations are put in place the country’s interest rate will continue to escalate, adding that, “…While we may say we are running a liberal economy, it doesn’t mean it is a lawless economy, it doesn’t mean it is an unregulated economy so it is a matter of how the regulator chooses to regulate the economy.”

He charged the BoG to do more diligent work on the micro-finance institutions.

Source: Newsghana.com.gh

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