The head of the finance department of the University of Cape Coast Professor John Gatsi has said microfinance institutions require a separate regulator other than the Bank of Ghana.
This is because, he said, the recent shut down of numerous microfinance firms, by the Central bank is not principle based.
“I can’t imagine how BoG can regulate microfinance companies. The best approach will be to look at a different regulatory institution having oversight over microfinance companies.The approach is not principle based,” he told Morning Starr host Francis Abban Monday.
He also challenged claims by the Central Bank that there will be no job losses in the shut downs.
“I don’t see any solution for the staff who may be affected by this whole situation. Some may go through some psychological trauma. What is happening will affect rural community participation in economic activities”.
The licences of 192 of them were revoked in addition to that of another 155 that have ceased operations.
Actions
A statement issued by BoG said these actions were taken pursuant to section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the BoG to revoke the licences of a bank or Specialised Deposit-taking Institution (SDI), when it determines that the institution is insolvent or is likely to become insolvent within the next 60 days.
Consequently, the BoG has appointed Mr. Eric Nipah as Receiver for the specified institutions in line with section 123 (2) of Act 930.
Revocation
The statement said the revocation of the licences of these institutions was to get rid of insolvent and dormant institutions that have no reasonable prospects of rehabilitation and have denied depositors access to their deposits, thereby constituting a threat to the stability of the financial system.
It said, by the revocation of these licences, the BoG sought to protect the stability of the financial system and to protect affected depositors.
Source: Ghana/Starrfm.com.gh/103.5FM
