The Central Bank, in responding to challenges in the microfinance sector, has released a list of certified microfinance companies to help customers make informed choices.
The list is made up of Tier 2 institutions or microfinance companies or and Tier 3 or money lending institutions across the country.
In a statement accompanying the list, the Bank of Ghana said it has noted the challenges in the microfinance sector and would like to assure the public that it is taking steps to address these challenges.
“The Bank has been monitoring Microfinance Institutions (MFIs) through offsite surveillance and onsite examination, and also has held a number of meetings with the shareholders and management of the affected institutions.
Together with the Government, the Bank is working on a comprehensive reform program to address the challenges in the sector, and strengthen regulatory and supervisory oversight,” the statement added.
The MFIs sector has been under stress for the past five years. There have been several reports about MFIs closing down and running away with clients’ monies to corporate governance challenges, promises of high returns on deposits and lack of qualified personnel running some MFIs.
The situation led to the collapse of DKM Microfinance and other institutions in the Brong Ahafo and Northern Region. Similar closures happened in the Volta and Greater Accra regions.
The Central Bank, last year, placed a freeze on the licensing of new institutions in order to properly scrutinise the existing ones and the release of this new list is expected to show customers which institutions can be trusted.