The immediate past Executive Secretary of Corporate Initiative Ghana, organisers of the Ghana Banking Awards, Mr Afotey Odarteifio, has called on the Bank of Ghana (BoG) to take immediate steps to help depositors recover their money from the microfinance institutions whose licences have been revoked.
We want to associate our self fully to this stament and hope the BoG will do its utmost to ensure that depositors get their money back.
The media and general public were recently hit by the news of the BoG revoking the licences of 70 microfinance institutions in the country. Our main contention has to do with depositors who have their funds with those institutions whose licences have been revoked.
We are aware that when such revocations happen, customers appear at the rough end of the stick since many of such depositors lose their money.
Since the financial services industry use more of depositors’ funds than shareholders’ funds, there is the need for utmost care to ensure that depositors would not lose their little savings with these institutions.
We can recall that this has happened with a number of bogus finance houses and money scams in the past, who seem to be operating fairly well and paying out to depositors, then there is an abrupt instruction from regulators to stop and that rather creates losses for depositors
Ideally, one would expect that these finance houses are made to wind down gradually and refund all deposits to the last penny before they close down.
We think that when depositors lose their money, they do not have any recourse particularly, since we do not have any depositors’ insurance arrangement like the Federal Deposit Insurance
In the US for example, Corporation (FDIC) protect the funds depositors place with banks and savings associations.
In fact records show that since 1933, when the FDIC was set up, no depositor has lost any money of FDIC insured funds. This offers the opportunity to call on the government to put in place a Deposit Insurance arrangement for the Ghanaian depositor.
As a country, there was the need to encourage savings, but instances such as this is a stab in the back of the savings drive.
