It appears the central bank is not taking its oversight responsibilities lightly in the wake of the scandal that hit the microfinance sector in recent times, roughly two years ago. The new Head of Other Financial Institutions Services Department (OFISD) of the BoG, Kofi Amoa-Awuah, says his outfit has suspended the issuance of fresh licences for microfinance operations as part of measures to sanitise the industry.
However, clients and customers of microfinance institutions can now breathe a sigh of relief since it is learnt that about some 30 microfinance companies have been referred to the Economic and Organised Crime Office (EOCO) for investigation and possible prosecution for fraud and embezzlement.
For good reason the companies have not been made public yet – suffice it to say that investigations are in motion, and sooner rather than later we will hear some microfinance companies ae due for court. The step is in the right direction because – amid the whole brouhaha some two years ago when it came to light that some microfinance companies were operating outside their mandate – a lot of customers’ lifetime savings have been locked up, with many wondering about their fate and how to re-coup such funds.
The customers and clients have been the hardest hit by the lack of proper supervision for these MFIs that enabled some to offer mouth-watering interest rates, and engage in speculative investments which have jeopardised so many innocent and unsuspecting customers.
Indeed, many are still waiting for some form of reimbursement, since they were not liable for the actions managers of these microfinance companies took in their name. It appears the microfinance sector is still encountering integrity problems, which is why it’s important for the BoG to strengthen its supervisory and oversight responsibilities so that innocent Ghanaians are not short-changed simply because they are participating in deepening financial inclusion.
A distressed microfinance sector is a disincentive to roping-in the largely unbanked informal economy, which needs to be formalised for higher national economic performance.