Bank of Ghana is reviewing the entire process of licensing new microfinance institutions and that all regional offices of the Bank are being resourced with staff to improve surveillance to intensify its intelligence network.

The Bank intends to improve collaboration with law enforcement agencies to deal swiftly with illegal financial service providers and intensify public education on financial literacy to avoid miscommunication.

Mr Milison Narh, First Deputy Governor of Bank of Ghana, said this on Friday at a media briefing in Accra on the revoking of the licenses of some 70 microfinance institutions in the country.

Mr Narh said there are currently 546 microfinance institutions, comprising 468 microfinance companies, 67 money lending companies and 11 financial non-governmental organizations while 92 institutions are waiting the fulfillment of final approval requirements.

He said the Bank had increased the minimum paid up capital for microfinance companies and money lending companies from GHC 500, 000 and GHC 300,000 respectively to GHC 2,000,000 and that all existing microfinance institutions have up to December 2018 to meet the capital requirements.

Mr Narh said fresh entrants would require the GHC 2 million prior to granting of final license and that the convergence of capital requirement for microfinance companies and money lending companies is to avoid regulatory arbitrage.

He said prior to the licensing of every microfinance institution, the applicant is expected to go through two stages of licensing in accordance with sections 5 and 6 of the Banking Act, 2014 (Act 673) as amended and non-bank financial institutions Act, 2008 (Act 774) respectively.

Mr Narh said the first stage of licensing include submission of an application accompanied by a certified true copy of the certificate of incorporation and company regulations, a business plan indicating five year financial projections.

He said granting of an approval in principle is not a license to operate as a microfinance company but it is as a letter issued to the applicant to fulfill certain conditions to enable the Bank of Ghana issue a license to operate.

Mr Narh said the 70 listed microfinance institutions documents were revoked because they failed to comply with the requirements of the bank.

He said the affected microfinance institutions had not been issued with a final approval and license to operate, stressing that approval in principle expires after six months.

Mr Narh said the accounts of these companies which were frozen are held by some universal banks and that none of such monies are with the Bank of Ghana as being rumored.