BoG to stop fraud in microfinance sector
The Bank of Ghana (BoG) is working with the Ghana Association of Microfinance Companies to develop a logo to distinguish licensed microfinance companies operating across the country from the unlicensed ones.
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The move is also intended to save the public from being defrauded by the unlicensed microfinance companies.
The Executive Secretary of the Ghana Association of Microfinance Companies (GAMC), Mr Joseph Donkor, made this known in an interview with the Daily Graphic on the sidelines of the launch of the association’s newsletter in Accra on Tuesday.
GAMC voice
The newsletter “GAMC Voice,” which will serve as a knowledge portal and learning platform for members and the public, seeks to promote good practices within the microfinance sector.
The newsletter is an output of the Microfinance Companies Capacity Improvement Project, a 40-month-initiative by the Agence Fancaise de Development and the GAMC.
The objective of the newsletter is to improve significantly, the quality of financial services by microfinance services for the poor population as well as for the small enterprises from the formal to informal sector.
Mr Donkor stated that the development of the logo was in its advance stages and was expected to be ready by the end of the year.
To enable the public to acquaint themselves with the logo, he said there would be massive media publicity across the country.
Microfinance scam
The country has been dealing with microfinance scam and the worst was the DKM microfinance scandal which hit the Brong Ahafo Region and other parts of the country last year.
According to Mr Donkor, the microfinance scams and frauds seriously affect the operations of the industry because the public loses confidence in the industry.
The association and the regulator of the industry, BOG, he said, were working on a number of initiatives to stabilise and sanitise the operations of the industry to restore the confidence.
While education for the citizenry was ongoing, he advised that individuals should be more cautious in dealing with microfinance companies by looking out for the credible BoG licence and the association’s certificate of the operating microfinance firm before associating with them.
Concerning the newsletter, he said it was one way of disseminating credible information about the industry while educating its members and the public.
Importance of newsletter
A Manager at the Bank of Ghana, Mr Philip Opoku Mensah, in his remarks, commended the association for the initiatives, saying that members needed such platforms to enable them to understand the regulations of the BoG.
He said the BoG had a lot to offer the microfinance companies in terms of regulation but needed such platforms to enable people understand.
The Board Chairman of the association, Mr Collins Amponsah-Mensah said credible information was crucial to the financial sector.
Subsequently, he said it was important to equip members as well as the public with such information to avoid the assumptions, which were without empirical evidence.
He assured the members that the newsletter would be sustained and would come in other formats to enable them access it on their phones and computers.