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Deputy Governor of  Bank of Ghana - Millison Narh
The central bank has vowed to be even more stringent in its probing of Micro Finance Institutions’ operations, even as the controversy surrounding its withdrawal of “approval in principle” for 70 of them rages on.


Raymond Amanfo, immediate past Head of Other Financial Institutions, told a press conference last Friday that the central bank will now zero-in on the profiles of directors or shareholders behind MFIs, having realised that some of the MFIs have fictitious names behind them.

Mr. Amanfo, who is now Head of Banking Supervision Department said: “It’s not enough to tell us the names behind these companies. We need to probe further and cross-check their competence to manage these institutions they purportedly front for”.

He added: “We are going to intensify our intelligence network; all regional offices of the BoG are being resourced with staff to improve surveillance of the microfinance landscape”.

A lot of depositors are claiming savings running into millions from the embattled MFIs; in the Brong Ahafo Region, where such MFIs thrive, depositors have staged demonstrations to demand their monies.

In July last year the BoG increased the paid up minimum capital for microfinance and money lending companies from GH¢500,000 and GH¢300,000 respectively to GH¢2million, and gave them up to December 2018 to comply.

The central bank last December published that it had revoked approval in principle licences it issued to some 70 microfinance companies, after the said MFIs failed to comply with the stated minimum capital requirement.

The approval in principle, the BoG explains, is to enable the MFIs raise the stated minimum capital and meet other requirements -- and not to start operations straightway.

Amidst reports that the affected MFIs had depositors’ funds locked up, the central bank insisted the approval in principle was not a licence to operate.


In all there are over 540 microfinance institutions in the country, and the central bank on many occasions has appeared overwhelmed by the sheer number of the institutions; Mr. Amanfo said the capacity of the bank at regional levels will therefore be strengthened.

Deputy Governor of the Bank of Ghana Millison Narh said the bank is yet to receive a formal report regarding malfeasance by the affected institutions. Nevertheless, he revealed that it is crucial for the bank to improve its collaboration with law enforcement agencies to deal swiftly with illegal financial services providers.

Commenting on the status of the beleaguered Brong Ahafo-based microfinance company DKM Diamond Micro Finance, Mr. Narh said an initial moratorium was lifted last year -- adding that all moneys evacuated from the company’s premises have been returned to officials of the company.

“Similarly, the amount frozen by the Financial Intelligence Centre on order of a high court has been released to DKM. The company had a total depositors’ fund of GH¢115.24million as per records available to our auditors,” he said.

Explaining the plight of DKM, the central bank said all licenced institutions are subject to off-site reviews and on-site examination.

“It was on such review and examination that DKM was found to have seriously flouted BoG’s prudential regulations and to be operating something close to a Ponzi scheme. To protect depositors and the general banking system in its area of operation, the central bank had no option other than to place a moratorium on its operations according to the tenets of Act 673 as amended.”

Source: B&FT

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