BoG to crackdown on MFIs breaking rules

The Bank of Ghana will soon take regulatory action against Microfinance Finance Institutions (MFIs) and financial houses that are refusing to payback investment of their customers.

“Some of these microfinances actually went beyond the rule by investing in other businesses that they were not supposed to. They pick money on short-term bases and invest in long term real estate and similar others. For those ones, we are trying to deal with them from the regulation aspect” Manager at the Market Conduct Office, Financial Stability Department at the Bank of Ghana (BoG), Augustine Amoako Donkor assured.

The decision by the BoG follows the constant complaints by some customers of distressed financial companies who have consistently failed to release the investments of customers.

Recently, customers of ASN Financial Services Limited threatened to embark on a demonstration if their monies are not refunded by the end of the month while customers of Accent Financial Services also called on the BoG to step in to help retrieve their locked up cash.

In an interview with Citi Business News, Mr. Amoako Donkor assured that the law will take its course in dealing with such companies.

“They are unable to give monies back to the customers because of liquidity challenges which they find themselves in because of the way they have managed their activities in the past. Some of them have actually flouted the rule and they will be dealt with” he revealed.

Stating that the situation is worrying, Mr. Amoako Donkor however assured that the BoG will enforce stricter measures whilst increasing supervision to reduce the recurrence of such situations.

“For those that are purely due to mismanagement, yes, we try to go after their management and let the law take its course. We admit it is a difficult one, it is a big challenge but we are now increasing supervision and regulation to reduce some of these incidence” he added.