President John Dramani Mahama has blamed the microfinance crisis that hit large parts of the country on poor supervision by the Bank of Ghana.

He said the Central Bank which is the regulator of the microfinance sector failed to effectively supervise the activities of some of the companies.

Delivering the 2016 State of the Nation in Parliament Thursday, the president said there has a mushrooming of microfinance companies in the last five years.

“These microfinance companies come under the direct supervision of the Bank of Ghana. Unfortunately, lack of effective supervision on the part of the central bank has resulted in many cases in which microfinance licensed by the Bank have breached the rules of procedure they were supposed to follow and have created supposed pyramid schemes that eventually came crashing down,” he stated.

He said one particular microfinance company, DKM, has squandered the about 77 million cedis of unsuspecting Ghanaians.

“Many depositors have lost their life savings and livelihoods,” he regretted.

The president said even though the issue lies directly in the bosom of the Bank of Ghana, “government has a concern for the poor unsuspecting Ghanaian clients who deserved to be protected by a more robust inspection and supervisory regime by the Central Bank.”

“Sack the Governor of the Bank of Ghana,” a Minority MP shouted.

“You can’t fire the Governor of the Bank of Ghana. You know that. You passed the Bank of Ghana Act and made the Central Bank autonomous,” the president retorted.

He said the regulator must not reward the reckless behavior of the microfinance companies.

The President also revealed that a Ghana Deposits Protection Bill is being prepared to be presented to Parliament for passage into law.

When passed, the law will "permanently sanitised and restore credibility to the Microfinance industry and strengthen the Bank of Ghana's supervision.

He told MPs to fast-track the passage of the bill into law when it is laid.

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