The Bank of Ghana (BoG) has announced new measures to safeguard customers’ deposits at micro finance institutions.
This is part of measures to prevent institutions from disappearing with depositors’ funds.
There has been an increase in recent months of institutions folding up. This has been attributed to a number of reasons such as bad management practices, increasing non-performing loans, fraudulent activities and expansion without a corresponding increase in capacity.
The head of Supervision of other financial institution department at the Bank of Ghana, Raymond Amanfu told Citi Business News that BoG will now require additional documentation from micro finance institutions.
“If we are going to renew your license, you will have to provide us with photographs of your key management staff because this idea of people just closing business, then we have the difficulty in knowing where they are” he said.
“So now if we have those pictures and photographs, we can publish then follow up.”
Regarding troubled institutions planning to bring in new investors, Mr Amanfu said: “…we have to make sure who these new investors are – as to whether they have the capacity to bring the capital to meet the depositors whose monies are locked up. It is very critical so we have to take our time to review these new investors who want to take over the troubled ones.”
Credit: citifmonline
