Microfinance association promotes self-regulation
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According to the association, this is based on 12 key performance benchmarks - capitalisation requirement, legal status, human resource management, products, services and marketing, credit methodology and human resource management are some of the benchmarks.
The Executive Secretary of GAMC, Mr Richard Amaning told the GRAPHIC BUSINESS that some of the members were able to source funds from the traditional banks.
“The regulation helped member companies to identify some major gaps in their operations as a number of them did not have requisite structures in place. Members took the opportunity to re-structure their companies and also increase their capital base,” he said.
He added that the regulation had boosted the confidence of members to embark on vigorous savings mobilisation just as the major financial institutions.
GAMC has 580 members nationwide with Greater Accra and Ashanti regions concentrated as their membership is 291 (50 per cent) and 125 (20 per cent) respectively. Out of these numbers, Accra has 122 licensed companies and Kumasi with 45.
The Head of Banking Supervision at the BoG, Mr Franklin Belynye, said they were working to speed up the licensing process, in spite of the volume of applications which is over 700.
So far, the GAMC said its major challenges were proposed upward adjustment of paid-up capital which it said could put undue pressure on smaller companies to meet it and the that the regulation had added on more cost to already high operational cost which subsequently affect the interest rates charged by the companies.
Mr Amaning said the association had introduced a new project, “Operational Software Standardisation Project,” to facilitate members’ ability to report to the regulator timely.
Microfinance Institutions (MFI) figures as at June 2013 stood at 144 licensed microfinance companies out of 564, two licensed financial non-governmental organisations out of 29,345 licensed susu’collectors, out of 480, and no licensed money lender out 296.
At the 7th meeting of the Ghana Microfinance Forum in Accra, a member of the board of directors of the BoG, Dr David Obu Andah, called for a review of the licensing requirements for MFIs in order to raise standards in the microfinance business.
He said the capacity of the staff of the banking supervision department of the BoG should also be built.
Graphic Business/Ghana