The Ghana Microfinance Institutions Network (GHAMFIN) has stated its commitment to cooperate with Bank of Ghana to rid the industry of bad nuts.

The central bank cracked down hundreds of microfinance institutions who were operating illegally. Thousands of Ghanaians have their savings running into millions of cedis locked up in those financial institutions.

“We therefore wish to re-assure clients of microfinance institutions and the general public that we will work together with the industry regulator and policy makers to strengthen regulation and policy framework for carrying out microfinance activities that serves the interest of the general public especially the low income and informal sectors of the economy.”

GHAMFIN said it has also rolled out increased client financial education, and therefore encourage the general public to enquire of the licences of all microfinance operators to ensure that they are licensed by Bank of Ghana.

 

Below is GHAMFIN’s statement

The Ghana Microfinance Institutions Network (GHAMFIN) issues this press release on behalf of itself and its member Associations; the Ghana Association of Savings and Loans Companies (GHASALC), the Ghana Association of Microfinance Companies (GAMC), the Money Lenders Association of Ghana (MLAG), the Association of Financial NGOs (ASSFIN), the Ghana Co-Operative Susu Collectors Association (GCSCA), the Association of Rural Banks (ARB), and the Credit Unions Association (CUA).

GHAMFIN and the Microfinance Apex Associations have taken notice of the recent challenges and issues arising in the sector which are being published and aired on the airwaves and empathize with clients whose deposits have been affected. Depositor’s funds and livelihood have been reported lost over the past months due to alleged fraudulent operations; poor management of funds and excessive capital expenditure of few microfinance institutions in the country.

Not only do the livelihoods of the depositors get affected, but also these institutions put a dent on the microfinance industry and cause panic withdrawals on other microfinance institutions as depositors become uncertain of the security of their deposits with other institutions.

GHAMFIN together with the microfinance Apex bodies,working with major actors including the Bank of Ghana and other partners are determined to bring sanity into the sector and wish to assure the general public that measures are ongoing to protect the whole industry to enable microfinance contribute its quota to Ghana’s developmental agenda. GHAMFIN and Member Associations have adopted an industry wide code of conduct aimed at complementing ongoing efforts by the regulator. The implementation of the code will be closely monitored in order to streamline the practices in the sector. Again, the regulation and monitoring of the activities and operations of the microfinance practitioners is being strengthened from the Apex Association level. The regulator has also indicated its plans to review the licensing process for the microfinance operators in its efforts to deal with the situation and the Apex bodies will work hand in hand with the regulator in monitoring the activities of the operators.

We therefore wish to re-assure clients of microfinance institutions and the general public that we will work together with the industry regulator and policy makers to strengthen regulation and policy framework for carrying out microfinance activities that serves the interest of the general public especially the low income and informal sectors of the economy.

As we roll out increased client financial education, we encourage the general public to enquire of the Licences of all microfinance operators they have dealings with and ensure that they are licensed by Bank of Ghana.

Furthermore, we also plead with the general public to report to the regulator (Bank of Ghana), GHAMFIN and the Apex Associations any inconsistencies in the operations of the microfinance institutions they have dealings with and also institutions which are not licensed by Bank of Ghana. By doing so, the industry would be able to clamp down on operators who are taking advantage of innocent depositors and ruining the image of the Microfinance sector.

We are hopeful that these measures would bring sanity to the sector and curb the indiscipline in the secto

Signed

Yaw Gyamfi

Exexcutive Director