The Bank of Ghana has said it is liaising with security agencies to deal with some microfinance companies in the Volta Region who are said to have swindled investors of their monies.
A statement from the BOG’s Communication Department said though they have not registered such facilities, they are “liaising with law enforcement agencies to trace and bring the perpetrators to book.”
[contextly_sidebar id=”swftFyVdThae09RQ9uY9qOyPQ3H3FNL3″]Some residents of the Volta Region who were victims of a microfinance scam during the beginning of this year, 2016, on Thursday threatened to boycott the general elections if government fails to assist them to retrieve their monies.
Customers expecting to make huge returns on their investments from companies including ‘Little drop’ investment club, ‘Prosperity and Good Health’ club and ‘Clear Image Investment’ could not recover their investments as owners of these firms cannot be traced.
This comes on the back of attempts by customers of DKM Microfinance company whose investments have been locked up in the company after several unsuccessful attempts to retrieve their monies failed.
Meanwhile, speaking on Eyewitness News, Frank Agyemang from the Public Affairs Office of the BOG urged the public to transact business with BOG approved financial institutions.
He added that they have a list of fake financial institutions and are in the processes of ensuring that the law deals with them.
“We have a list of those who are operating similar schemes in the Volta Region who have been properly apprehended and the processes have started to make sure that they are properly dealt with by law,” he added.
Below is the full statement:
RE: AGITATIONS BY CUSTOMERS OF ‘MICROFINANCE’ COMPANIES IN THE VOLTA REGION
Reports that some companies operating illegal microfinance companies in the Volta Region have succeeded in convincing customers to part with various sums of money have come with grave concerns.
The Bank of Ghana wishes to state among others that:
- Little Drops, Prosperity and Good Health Develop Winners, Royal Foundation Global Leads, Royal Care, Marceph Wealth, JODEQ Network Clear Image and Divine Rain are NOT licensed and regulated by the Bank. Hence, the Bank had no control over their operations or interest payment promises to clients.
- Clearly, as unlicensed institutions engaging in deposit mobilisation or any other activity akin to banking they were in breach of Section 4 of the Banking Act, 2004 (Act 673).
- The Bank deems the activities of the aforementioned companies, as reported, as purely fraud disguised as some form of banking business.
- The Bank is liaising with law enforcement agencies to trace and bring the perpetrators to book.
- A number of unlicensed operators of similar schemes in the Volta Region have been apprehended in the past and reported to the law enforcement agencies.
- Little Drops, Prosperity and Good Health Develop Winners, Royal Foundation Global Leads, Royal Care, Marceph Wealth, JODEQ Network Clear Image and Divine Rain adopted clandestine movements that made them known only to their clients who were, perhaps, lured by the high interest promise. They have ceased operations and now cannot be traced by those who knew where they were.
The activities of private companies and individuals who deceive the public with phoney money schemes are of great concern to the Bank, for which reason tighter surveillance activities have been introduced.
But as a collective responsibility to check the activities of such criminals, the general public should please report to the BoG or the Ghana Police any institution operating without a licence or where they believe licensed institutions may be breaching the laws and regulations governing the conduct of their business. This will assist the BoG, in partnership with security and law enforcement agencies, to take the appropriate and timely corrective actions to prevent further damage to the financial system.
In the meantime, the public is advised to observe the following:
- Do business with only licensed institutions in the country, by first inspecting their licence which must be displayed in their banking halls. When in doubt, members of the public have the right to confirm with the BoG the licence status of any company. Further information is available at the BoG website (www.bog.gov.gh) and all Bank of Ghana Regional Offices or call the Bank on 0302 66 5252.
- As an indication, all licensed microfinance companies by the BoG would include the word ‘microfinance’ in their registered name.
- Deposits made at an unlicensed institution are at the risk of the depositor and as such the Government or BoG will not be responsible for such deposits.
- Be cautious when dealing with companies offering abnormally high interest on deposit. Any savings interest rate which is abnormally higher than Government Treasury Bill rates should be a signal that the potential risk is high. Remember the rule of thumb- the higher the return, the higher the risk.
Issued by: Communications Department
By: Godwin A. Allotey/citifmonline.com/Ghana