The Bank of Ghana (BoG) has been asked to intensify its monitoring of activities in the microfinance industry to get rid of companies that do not meet standards.
Over the years many microfinance institutions operating in the country have collapsed, a trend which has affected clients who invest in the microfinance business.
[contextly_sidebar id=”lQA6swkntrYTGlqkEA71egBcVdBcv2ZJ”]Due to this, the Bank of Ghana has raised their minimum capital requirement from GH¢500,000 to a minimum of GH¢1,000,000 and has also published the full list of accredit and licensed microfinance institutions on their website.
Speaking to Citi Business News, the Chief Executive Officer (CEO) of 72 Hour Microfinance Services, Albert Koranteng, welcoming the new 1,000,000 minimum capital requirement, said there too many microfinance companies in Ghana and there is the need to have measures to regulate the industry to weed out the bad ones.
“I think that we have too many microfinance institutions that do not have to be operating because in every business there must be a cutoff point and I believe that the one million cedis is not too much, just to be able to flash out the bad nuts out of the systems. This will help raise the confidence of the Ghanaian public in the microfinance business.”
The collapse of these companies was the outcome of various processes that did not go well and not necessarily a one-time event, according to Albert Koranteng.
He said the company has met the 1 million minimum capital requirement and as a company they were in the market to serve the Ghanaian unbanked market and also help them meet their financial needs.
He spoke to Citi Business News at the inauguration of the new Head office and branch opposite the Odorkor Post Office on the Main Odorkor Highway, Accra.
The proliferation of Microfinance Institutions in recent years has triggered fears that some regulatory and prudential requirements could be compromised, especially as some of the companies have been found to be operating illegally.
By: Norvan Acquah – Hayford/citifmonline.com/Ghana