The Ghana Association of Micro-finance Companies (GAMC) has expressed worry over the process of licensing micro-finance companies under the Central Bank’s new regulatory guidelines.
National President, Collins Amponsah-Mensah has observed a number of firms are venturing into the sector without due consideration to the regulations.
He therefore wants the regulator to tighten entrance for new businesses in the sector until it completes the licensing and regularization of those already in operation.
“As it is now, as they [Bank of Ghana] try to process those who are already in operations, others are coming in and so the number gradually becomes overwhelming and that makes it very difficult for the regulator to work on”, he observed.
Mr. Amponsah-Mensah also charged the Central bank to be bold in closing down firms flouting the regulatory guidelines early enough to protect public interest and image of the sector.
He suggested that commencement of operations should be suspended temporarily after business incorporation at the Registrar General’s Department.
The Association has registered close to 550 firms, but only 170 have so far been issued with provisional licensing from the Bank of Ghana.
Regulated activities under the Non-bank Financial Institutions Act 2008, increased from a single tier to four tiers, to include Susu companies, Susu collectors, money lenders and Financial NGOs.
Susu companies taking deposits and making profits are operating under the second tier of regulated regime, which took effect from January 2012.
Such companies are to hold an initial minimum paid-up capital of not less than Gh¢100,000.00 for one unit office.
Players in the sector are suspicious the regulator might be raising the capital holding for MFIs.
But the GAMC President told Luv Biz Report there is the need for national systems and structures to support growth of micro-finance institutions than raising the minimum capital for the sector.
“When you look at the regulation, equity is restricted to only Ghanaians and these are companies that were started solely by Ghanaians from their own resources. You go some countries and they have micro-finance wholesale banks where MFIs can go and borrow from; in Ghana, we don’t have it”, stated Mr. Amponsah-Mensah. “If the regulator would want to push up the minimum capital, then the government would also look at the support that it wants to give to micro–finance companies”.