The Bank of Ghana (BoG) has provided a list of 19 entities that are providing loan services without the approval from the central bank.
The BoG said the actions of the entities were in contravention of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
The central bank described these entities as ‘illegal’ that mostly employ the use of mobile applications and social media in their activities.
Among the entities providing loan services without a licence from Bank of Ghana include, SikaPurse Quick Online loan, 4Cedi Instant Mobile loan application, Zidisha Online Loans, GhanaLending, ChasteLoan Application, LoanClub-Ghana Instant Loan, AdamfoPa Loan and MetaLending- Instant Cash Loan.
The other unlicensed financial companies are Wohiasika Loan (Ghanaloan.net), Boseafie – Bosea Micro-Credit, SikaKasa Online Lending, LoanPro – digital and instant loan, SikaWura Loan Application, BegyeBosea Loan and LendingPapa – Online Loans.
The rest are, CrestCash Loan, Credxter – Loans and Hire- Purchase, MobiLoan Application, Cedi Now – Cash Loans Application.
Data and privacy
The Central Bank further said, “the activities of these unauthorised entities amount to non-adherence of the consumer protection requirements and an abuse of customers’ data and privacy laws”.
“The Bank of Ghana is taking steps to take action against these entities and hereby advises the general public to desist from doing business with all unlicensed loan providers.
The BoG in a statement advised Banks and Specialised Deposit-Taking Institutions as well as payment service providers not to facilitate the illegal transactions of the unlicensed loan providers.
The central bank in August 2019 revoked the licences of 23 savings and loans companies, as well as finance houses for being insolvent and appointed a receiver to manage their affairs.
“It is the Bank of Ghana’s assessment that these institutions have no reasonable prospects of recovery and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors,” the statement added.
The steps marked the end of an industry of distressed savings and loans and other financial institutions that started in August 2017 and cost the government at least GH¢12 billion in bonds and cash to cover depositors’ holdings.
In terms of total assets, the largest of the finance companies is the non-bank financial institutions, made up of savings and loans companies, finance houses, mortgage finance companies and leasing companies. Together, they held assets worth GH¢11.4bn at the outset of 2019, accounting for just over nine per cent of total banking sector assets.