MCAG bemoans increase in unlicensed digital, online lending platforms
The Chairperson of the Micro-Credit Association of Ghana (MCAG), Wilberforce Ofori, has expressed concern about what he described as the increase in unlicensed digital and online lending platforms in the country.
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According to him, while these unregulated activities pose serious risks to consumers, it is also causing damage to the integrity of the financial sector.
Mr Ofori recalled the Bank of Ghana's (BoG) warning in June about over 97 unlicensed loan applications, and the Cyber Security Authority’s efforts, including nearly 400 arrests, and noted that despite these developments, these operations persist.
Mr Ofori observed that many individuals, driven by financial desperation, resort to those services, often being offered exorbitant interest rates and short repayment periods that lead to emotional distress and harassment when the tides change.
“I caution all members to desist from engaging in such operations and urge our stakeholders to work together to address this issue and protect the reputation of our industry,” he said.
Mr Ofori raised the alarm at the association's 15th Annual General Meeting held virtually last Thursday on the theme: "Micro-Credit: A Catalyst for the Growth of MSMEs."
The event focused on reviewing the association's financial performance for 2023 and preparing for future operations.
Financial resources
While providing an insight into the financial health of the association, he stated that the financial resources of the association were judiciously used and carefully managed, thus, enabling it to accomplish the targets set by the governing board.
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At the close of last year, he said the association’s actual revenue amounted to GH¢2,148,053 while the actual expenditure was GH¢2,113,881.
“Despite some variances, our financial performance was good, and I am proud to report that we remained within our budget, ensuring the financial stability of the association,” he said.
Mr Ofori stated that although the association aimed to register 160 new members, it achieved 140 new registrations, generating GH¢2.8 million from annual subscription fees.
He further acknowledged the continued support from the Bank of Ghana, which provided GH¢2 million to support the association’s monitoring and inspection activities through the other Financial Institutions Supervision Department.
The support, he said, had been crucial in maintaining the integrity and effectiveness of its operations.
Commitment
The Executive Director of the association, Ebenezer Quartey, said that last year, the MCAG made significant strides in advancing and supporting the micro-credit sector, reinforcing its commitment to empowering micro-finance institutions and ensuring their sustainable growth.
He said one of the key achievements was the launch of a member portal, developed with financial support from GIZ.
The innovative platform, he said, had revolutionised how members assessed the health of their institutions by providing clear performance indicators, enabling more informed decision-making and better overall management.
To further support its members, he said an on-site examination was conducted, aimed at strengthening institutional resilience and ensuring business sustainability.