The Bank of Ghana (BoG) has strengthened its supervisory role through surveillance for early detection of distress coupled with effective on-sight examination to confirm compliance with regulatory requirements, as one of the measures toward sanitising the microfinance sector in the country.
The measures have become necessary following the activities of some sham microfinance institutions in the country, notably DKM, God is Love Fan Club, among others, which have swindled customers.
Addressing parliament on Tuesday February 22 on the activities of these financial institutions, Finance Minister Seth Terkper said the BoG is sanitising the sector.
According to him, the BoG has strengthened its supervisory role through the establishment of other financial institutions’ supervision departments dedicated to microfinance companies.
They are in charge of “surveillance for early detection of distress and effective on-sight examination to confirm compliance with regulatory requirements”.
Mr Terkper also disclosed that the BoG had dispatched five of its staff to its regional offices at Sunyani, Kumasi, Takoradi, and Tamale for ongoing surveillance of the microfinance institution subsector.
The Bank has intensified campaign through its public education committee against the activities of unlicensed microfinance institutions and to accurately educate the public on financial literacy, Mr Terkper added.
He noted that the BoG had also instituted punitive measures against unauthorised financial institutions.
“These include the refund of deposits taken by such businesses and penalties for undertaking such unauthorised deposits such as imprisonment for a term not less than two years,” he said.
