The Bank of Ghana on Monday presented Final Licenses to 90 Microfinance Institutions at a short ceremony in Accra, the first time in the country’s financial landscape that such an event had taken place.
The Bank of Ghana took over the regulation of the Microfinance industry over a year ago, following the unbridled springing up of such institutions throughout the country without supervision.
To date, the Bank had issued provisional licenses to 249 microfinance institutions out of which the 90 had met the needed requirements for the final licenses.
The breakdown of the 90 companies are 77 Microfinance companies, 11 Money Lending Companies and two Financial Non-governmental organizations.
Speaking at the ceremony, Mr Philip Cobbinah, Deputy Head of the Banking Supervision Department of Bank of Ghana, reminded the successful institutions that the handing over of the licenses came with obligations that must be met.
Some of the requirements include submission of prudential returns, compliance with the limits on deposits and loans, and prior approval by the Bank of Ghana before the introduction of new products to the market, among others.
Mr Cobbinah warned that the institutions would be fined GH¢12,000 and also risked withdrawal of their licenses on infringement of any of the regulations.
He said while the Bank of Ghana knew that Microfinance regulation was not going to be a simple process because of the varied array of institutions, there was the need for the parties to help in protecting customers in their effort to maximize profits so as to provide meaningful microfinance services to the poor.
Mr Cobbinah expressed the hope that the partnership would help in the fight against poverty and speed up the pace of economic growth and development.
Mr Kwame Sarpong Osei-Bonsu, Assistant Director of Banking Supervision Department, said the Bank of Ghana was helping the microfinance institutions to enhance their systems and improve corporate governance.
He said while record keeping and controls systems were weak in most of the microfinance institutions, the Bank of Ghana was offering trainings to address the capacity needs as well as stepping up off and on-site supervision to ensure that the institutions operated within the law.
Mr Osei-Bonsu, who is also head of the Non-Deposit Taking (NDT) and Micro Finance Institutions (MFIs) at the Bank of Ghana (BOG), said the 90 institutions given their final licenses had gone through rigorous approval processes and would be constantly monitored to ensure that their operations were in line with regulations to enhance service delivery and safeguard the public interest.