Beware Of Unlicensed Microfinance Institutions

Ghana cedi

Many business opportunities offered under Ghana’s democratic dispensation are being taken for granted by certain institutions.

A lot of businesses in different sectors of the economy have consciously decided to operate their businesses without licenses. Such companies, however, have been able to deceive members of the public.

In a few instances, regulators, whose surveillance units are up and doing, have been able to catch up with these fraudsters but most often, these illegal operators succeed in remaining unnoticed for so many years.

The Bank of Ghana’s recent warning to members of the public not to transact business with some four microfinance institutions in the country says volumes about the tricky situation in the country.

Owing to the atmosphere that has been created by Government for the establishment of businesses by individuals and groups, some unscrupulous persons have tended to abuse the freedom and outwit regulators.

BUSINESS GUIDE would like to first and foremost congratulate the Bank of Ghana for the vigilance of its surveillance unit lately which has resulted in the detection of fake operators in the non-financial sector. That a business would operate without license in any part of the country makes mockery of the freedom enshrined under Ghana’s Constitution particularly for creating an enabling business environment.

Managers of MEDLORM Microfinance Limited, African Guarantee Trust, Abbey Cash Microfinance Limited and Swift Financial Services should bow down their heads in shame for their actions.
According to the Central Bank, none of the aforementioned institutions applied to it for a license to operate. Were it to be that they applied for the licenses, but were being denied it, that would have been a different case. Perhaps members of the public would have even sympathized with them but they chose to operate without regard for the laws of the land. This is sheer negligence which warrants an outright punishment.

As far as this paper is concerned, the bank has cautioned members of the public who would want to transact business with any of the four institutions that they would be doing so at their own peril, it is not known exactly what punishment awaits the institutions and their management.

Having operated up to this stage, it stands to reason that a lot of people have made investments into the sanctioned companies. So the question that readily comes to mind is: “What happens to their investments?”

A similar incident happened not long ago in which Onward Investments, another company defrauded many people.

Many died when the operations of Onward Investments were declared illegal by the Central Bank.

BUSINESS GUIDE would want the Bank of Ghana to press further and freeze operations of the four organisations and desist from making mere announcements.

So far, the Central Bank has granted 45 provisional licenses whilst other applications are still being processed. Also, it has asked companies whose documents are being processed to stop using the Bank of Ghana’s licensing process as an advertising tool for their businesses.

Let us begin to question the genuineness of companies whose products and services we patronize.

 

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