Dr Yaw Gyima-Larbi, the head of microfinance and banking supervision at the Bank of Ghana (BoG), reportedly has announced that the central bank has granted final operating licenses to 171 financial institutions. These include 143 microfinance companies which make small loans to entrepreneurs for business ventures; 25 money lenders, which make short-term loans for any purpose; and three financial non-governmental organizations (NGOs).
Dr Gyima-Larbi also cautioned Ghanaians to be wary of institutions that are not licensed and accredited in order to avoid fraud and manipulation. He noted that approximately 116 cases of alleged financial malpractice by unlicensed microfinance institutions (MFIs) are currently pending.
BoG began requiring MFIs to be licensed in 2011 in an effort to protect consumers against fraud by requiring MFIs to submit periodic financial returns, receive prior approval from BoG before introducing new products and comply with various limits on deposits and loans.
By Makai McClintock, Research Associate
About the Bank of Ghana (BoG)
The Bank of Ghana has regulatory and supervisory authority over banking and financial institutions in Ghana, including rural and community banks, savings and loan companies, credit unions and cooperatives. The Bank of Ghana is to conduct annual on-site audits of these institutions, however nonprofit organizations in Ghana are not regulated by any government agency. As of December 2011, BoG reported total assets of GHS 12.4 billion (USD 6.6 billion).
Sources and Additional Resources
MyJoyOnline Business Article, “BOG Gives License to 171 Financial Institutions,” http://business.myjoyonline.com/pages/news/201305/105368.php
MicroCapital, 26 November 2012: “MICROCAPITAL BRIEF: Bank of Ghana Warns of False Advertising bi Microfinance Institutions Medlorn Microfinance, African Guarantee Trust, AbbeyCash Microfinance, Swift Financial Services”, https://www.microcapital.org/microcapital-brief-bank-of-ghana-warns-of-false-advertising-by-microfinance-institutions-medlorm-microfinance-african-guarantee-trust-abbeycash-microfinance-swift-financial-services/#more-21208
MicroCapital, 15 November 2012: “MICROCAPITAL BRIEF: Bank of Ghana Grants Final License to 90 Financial Institutions”, https://www.microcapital.org/microcapital-brief-bank-of-ghana-grants-final-license-to-90-financial-institutions/
MicroCapital, 13 September 2012: “MICROCAPITAL BRIEF: ProCredit Ghana Sounds Alarm on Multiple Lending, Calls for Tighter Entry Requirements for Microfinance Institutions”, https://www.microcapital.org/microcapital-brief-procredit-ghana-sounds-alarm-on-multiple-lending-calls-for-tighter-entry-requirements-for-microfinance-institutions-mfis/
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
Similar Posts:
- SPECIAL REPORT: An Interview with Christoph Pausch of e-MFP on European Microfinance Week, Luxembourg & Online, November 2023
- MICROCAPITAL BRIEF: Liberation Community Finance Expanding Branch Network, Product Lineup for Farmers, Women, Youth in Uganda
- SPECIAL REPORT: Green Action Group Celebrates 10th Anniversary at European Microfinance Week #EMW2023
- SPECIAL REPORT: Digitizing Microfinance to Meet Customer Needs via an Incremental Approach #EMW2023
- SPECIAL REPORT: European Microfinance Week 2023 Is Almost Here! A Tour of the Upcoming Conference’s Sessions and Streams
