BoG asked to decentralise operations: In regional capitals
The Principal Consultant at Osei Tutu II Centre for Executive Education & Research, Nana Otuo Acheampong, has called on the Bank of Ghana (BoG) to fully decentralise its operations in the various regional capitals in the country.
Such a move he said is to give its branches some powers and autonomy to effectively regulate the activities of banking institutions, particularly the microfinance institutions in those regions.
“The bank already has some branches in the regions but they need some authority to enable them to work more effectively”, he told the GRAPHIC BUSINESS in an interview.
The call comes in the wake of the wave of incidents affecting the operations of some microfinance institutions in the country.
Last week, the GRAPHIC BUSINESS gathered from some of the victims of the defunct DKM Microfinance that the inaction of the BoG in the regions gave them the confidence that the microfinance institutions in the Brong Ahafo Region, for instance, were doing the right thing.
According to them, if the central bank had intervened to warn them about the dangers associated with doing business with those institutions, they would have advised themselves.
Nana Acheampong said microfinance institutions were not bad in themselves but they needed to be properly regulated with all their actions vetted before they were allowed to operate.
In their attempt to attract more depositors, some of the microfinance institutions quote astronomical interests on deposits.
For instance, there are reports of some quoting as high as 55 per cent on two months deposits.
Ironically, it is not clear how they intend to invest the monies to attract such large interests.
Presently, the most attractive investment instrument on the market is the government’s treasury bills which has an annual yield of about 23 per cent per annum, risk free.
Many have expressed surprise at the manner Ghanaians allowed themselves to be swindled by operators of such microfinance schemes in the country.
Due to the gravity of the problem within the fledging sector, President John Dramani Mahama ordered the confiscation of the assets of owners of some microfinance institutions in the country.
Key among the institutions are DKM Microfinance and God Is Love Microfinance among others whose activities he described as fraudulent.
The order is intended to help recover some monies to pay the thousands of people who saved with those institutions.
“I know this will not be enough but at least people will have something small to sooth their pain”, the President said.
BoG acts
The central bank a couple of weeks ago, revoked the licenses of about 70 of such institutions in the country with a threat to close down more in the coming weeks.
Although the move is intended to prevent those companies from swindling more people, the bank has been bashed for its actions because some banking experts are of the view that the move will rather worsen the plight of depositors as the owners of the companies would go underground. — GB