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Bank of Ghana worried about Microfinance institutions in Volta Region

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Bank of Ghana3The Bank of Ghana (BoG) says reports that some companies operating illegal microfinance companies in the Volta Region have succeeded in convincing customers to part with various sums of money have come with grave concerns.

A statement issued by the Communications Department of BOG said the concerned institutions such as Little Drops, Prosperity and Good Health Develop Winners, Royal Foundation Global Leads, Royal Care, Marceph Wealth, JODEQ Network Clear Image and Divine Rain are not licensed and regulated by the Bank.

Hence, the Bank had no control over their operations or interest payment promises to clients.

“Clearly, as unlicensed institutions engaging in deposit mobilisation or any other activity akin to banking they were in breach of Section 4 of the Banking Act, 2004 (Act 673),” the statement said.

The Bank said it deemed the activities of the aforementioned companies, as reported, as purely fraud disguised as some form of banking business and is liaising with law enforcement agencies to trace and bring the perpetrators to book.

It said a number of unlicensed operators of similar schemes in the Region have been apprehended in the past and reported to the law enforcement agencies.

The statement said the activities of private companies and individuals who deceive the public with phony money schemes are of great concern to the Bank, for which reason tighter surveillance activities had been introduced.

It urged the public as a collective responsibility to check the activities of such criminals and report to the BoG or the Ghana Police Service any institution operating without a licence or where they believe licensed institutions may be breaching the laws and regulations governing the conduct of their business.

“This will assist the BoG, in partnership with security and law enforcement agencies, to take the appropriate and timely corrective actions to prevent further damage to the financial system,” it said.

The statement urged the public to do business with only licensed institutions in the country, by first inspecting their licences, which must be displayed in their banking halls or confirm the licence status of any company from the BoGs Regional Offices.

It said the BoG would not be responsible for deposits made at an unlicensed institution and are at the risk of the depositor and called for caution when dealing with companies offering abnormally high interest on deposit.

“Any savings interest rate, which is abnormally higher than Government Treasury Bill rates should be a signal that the potential risk is high. Remember the rule of thumb- the higher the return, the higher the risk,” the statement added.

Source: GNA

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