By: Fred Yaw Sarpong- Daily Express
Regulator of the banking industry, Bank of Ghana (BoG) has directed two of the 10 illegal financial service providers who were operating without license in the country, to submit a list of their depositors before they can start paying back the monies to their customers.
Bank of Ghana placed ban on all these companies and also freeze their accounts after they were identified operating as microfinance institutions without licenses.
The two companies are Buoyant Investment Limited operating in Techiman and Jirapa, and the Little Drops Helping Hand Association operating in Ho, Techiman, Sunyani and Berekum.
According to the Governor of the central bank, Dr. Henry Kofi Wampah the central bank will lift the ban on the account of these two companies after they have submitted the list of their depositors. He said this at the 66th regular monetary policy meetings (MPCs) with the media in Accra.
Dr. Wampah said already these two institutions have approached the central bank and are in the process of paying out the monies to the depositors.
However, Dr. Wampah said they are demanding the list of the depositors so that the central bank will supervise the payment to the depositors.
“I soon as we receive the list from these companies we will lift the ban on their accounts so that they can start paying their clients,” the Governor said.
He stated that with the remaining seven companies they are still monitoring their activities. “But we are really determine to stop the activities of such unlicensed institutions,” he added.
On the part of DKM, the central bank said by the close of this week or early next week the company will start operating again and the customers who want to withdraw their monies can do so.
“The process of lifting the ban on DKM’s account has already taken place and we hope to give them go ahead to start their work. They will be operating like the normal microfinance institution and there is no need for customers to rush taking their monies from the DKM,” he stated.
A few week ago, the central bank identified ten (10) illegal financial service providers operating in the country without licenses contrary to section 4 of the Banking Act, 2004 (Act 673) as amended.
According to the central bank, these unlicensed financial institutions attract their clients by enticing them with very high and unsustainable interest rates but fold up within a short time due to their inability to meet depositors’ demands.
Mainly, these institutions operate in the Upper East, Upper West, Northern, Brong Ahafo and Western regions of the country.
The initial 10 identified unlicensed institutions mentioned were; Care for Humanity International operating in Wa, Sunyani and Techiman; Buoyant Investment Limited operating in Techiman and Jirapa; God is Love Fund Club, operating in Sunyani, Techiman and Nkoranza; Perfect Edge Group, operating Sunyani; and Perfect Business Fund Club operating in Sunyani.
The rest mentioned are L. P. M Eye Adom Fund Club in Sunyani; Creative Fund Club from Koforidua; Little Drops Helping Hand Association in HO, Techiman, Sunyani and Berekum; Financial Giants Fun Club from Bolgatanga, Wa and Sunyani; and Great Winners Fun Club from Kete Krachie and Dambai.
Bank of Ghana said the unlicensed institutions are promising unsustainable interest rates and other packages. They are offering rates as high as 30% to 55% every two months is not sustainable.