According to her, although investors are ready to invest in Ghana?s MFIs, the size of most of these institutions is not financially strong to meet the required volume of services needed.
Speaking in an exclusive interview, Akosua Oduma Oppong-Tawiah maintained that microfinance institutions must see the decision by the Central Bank to increase the primary reserve ratio by 200 basis points to 11 percent as an opportunity to consolidate and become more financially stable.
It could be recall that the Central Bank of Ghana had asked banks to increase their primary reserve ratio by 200 basis points to 11 percent, where commercial banks are obliged to retain or deposit 11 percent of their available funds in cash with the Central Bank to act a buffer against any unforeseen circumstances. If the increament is for banks then its doesn?t affect MFI?s directly
Many industry players including bankers indicated that the proportion of money available to them as per this policy, to lend had gone down, among businesses? concerns of a credit squeeze and very little to lend.
But, according to Akosua Oduma Oppong-Tawiah, Central Bank?s perspectives is geared toward the general good, even though it will affect the operations of banks, it is the responsibility of the Bank of Ghana to serve as a check on MFIs in the country to ensure that MFIs are not toying with peoples? funds, adding that the increase in the reserve ratio is one of such moves by BoG to bring sanity into the banking industry for it to do what is best. If the increament is for banks then its doesn?t affect MFI?s directly
She stressed the need for mergers or consolidations, in order for MFIs to attract bigger investors, calling on the Central Bank to look at the regulations again because there are too many MFIs, and added that even though their capital requirements have been increased, a lot more needs to be done to create bigger institutions.
Ghana has over 500 registered microfinance institutions; and despite the increment of stated capital requirement for the sector from GH?100,000 to GHS 500,000, interest in establishing new MFIs is still high.
Although there is the belief that there is some level of stability in Ghana?s microfinance industry, operational and liquidity challenges, over the past years, have led to the collapse of some companies and depositors losing their funds. This, The MD of Capital and More Microfinance Company Limited said, could be avoided if there was consolidation.
?If three is consolidation, even with the increase in ratio, the Institutions will still have enough to lend,? she said.
Making some comments on the collapse of some MFIs in the country, Akosua Oduma Oppong-Tawiah believes that the root cause of most of these happenings are the temptation by many companies to diversify into areas which are not their core business thereby failing at the end.
According to her, regulators of the industry need to look into that, since most MFIs after mobilizing face the tendency to diversify into risky areas including real estates which are slow to move hence locking up peoples? funds and investments.
She assured her clients and the general public that Capital and More Microfinance remains focus on its core mandate of pushing the banking system forward by delivering the best of services, in delighting their customers, and to push the business of financial inclusion.
Giving some insight into the company?s operations, Akosua Oduma Oppong-Tawiah said Capital and More Microfinance Company operates in the informal space to provide loans/credit, savings, as well as investment platform for customers to be part of the financial system of the country by acknowledging the mandate given to the banks by the Central Bank to champion this course.
She explained that lots of Ghana?s population falls outside the space within which formal banks operate ?and that is where we come in, we are to simplify the process, make it easy for an average Ghanaian to at least own an account and access credit,? she said.
She also averred that although they are operating in the informal sector, some of the players in the formal sector also come in because of the convenience and flexibility that the company brings to the table and the services that go with it.
Akosua Oduma Oppong-Tawiah also maintained that accessing loans from Capital and More be it Business loans, SME loans, Import finance, Bridge financing, LPO financing, Personal loans and others, the flexibility that comes with the services as far as bureaucratic procedures are concern, puts the company as number one choice for clients.
She allayed the fear of doing business with the company and stressed that the company had increased its stated capital base to GH?500,000 above BoG required GH?100,000, which gives it a firm ground in the industry.
?We have solid financial grounds so if you are doing business with us be sure of maximum security of your investments. We have over the period, grown our financial books reserve to close to a million, and our assets to over a million,? Akosua Oduma Oppong-Tawiah added.
According to her since their core mandate is to help businesses to grow, their loans are not collateral based but just sureties.
She mentioned that, ?Our core business is to provide financial services and not to sell collateral. We give you what your business needs to grow; the motivation is to make sure our client achieve economic empowerment. MFIs are mandated to grow the informal sector which according to Ghana Statistical Service is 86.1% of the population and crucial to the growth of the economy.?
Akosua Oppong-Tawiah also indicated that Capital and More Microfinance Company Limited is bringing solution to improve businesses and the life of clients in general, which is why the company has tailored services to specific needs of the people.
She also advised people to develop the habits of savings. According to her, it is expensive to borrow, hence Capital and More Microfinance has position itself to encourage saving, educating people to raise their own capital through saving.
Akosua Oppong-Tawiah said, the company had adopted state of the art technology in reaching out to clients and to grow their businesses.
According to her the use of state of the art technology to do business enhances company-client relationship since it builds that needed confidence in the clients.
She advised the general public to look to Capital and More Microfinance Company Limited for all their financial needs.