Beware of unlicensed financial institutions - BoG warns public
The Bank of Ghana (BoG) will not take responsibility for fraudulent activities by unlicensed financial institutions.
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It has, therefore, warned the public to be circumspect in dealing with such institutions.
The Communications Director of the BoG, Mr Bernard Otabil, said people must do business only with licensed financial institutions in the country to avoid being defrauded by unlicensed institutions.
Depositor’s own risk
“Deposits made at an unlicensed institution are at the risk of the depositor and as such the government or BoG will not be responsible for such deposits,” he warned.
Addressing the media at Hohoe last Tuesday about the BoG’s concerns over a recent ‘microfinance scam’ that hit the Volta Region, Mr Otabil reiterated that the institutions involved were not microfinance companies licensed or regulated by the BoG.
More than 200 people, including traders and artisans in Ho, hit the streets when they realised that they had been defrauded by some fun clubs. Persons who invested at least a minimum of GH¢450 were promised returns between GH¢5, 000 and GH¢6,000 within five months.
Licence of authorisation
“A microfinance institution licensed by the Bank of Ghana would display a licence of authorisation to engage in that business and would have the word ‘microfinance’ as part of its registered name,” he explained.
According to him, the victims of the reported cases claimed they were made to understand that they were only joining a ‘fun club’ or ‘investment club’ that was pooling funds such as the susu scheme.
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Mr Otabil cautioned people not to engage companies offering abnormally high interest on deposits and added that “any savings interest rate which is abnormally higher than government Treasury bill rates should be a signal that the potential risk is high.”
Describing what happened in the region as criminal, and not a banking activity that had gone wrong, Mr Otabil said the BoG was collaborating with security agencies to apprehend the perpetrators.
Fraudsters
The BoG communications director noted that fraudsters had succeeded in their operations because the media gave them the platform to advertise their activities.
Appealing to the media to support the BoG and security agencies to clamp down such fraudulent activities, he said media practitioners should give the public honest, transparent, fair reports and information at all times.
Meanwhile, the police said no complaint had been made to them concerning the recent scam in the region.
The Hohoe Municipal Commander, Superintendent of Police Stephen Boadu, said most of the victims defrauded by Little Drops and Prosperity International were from his jurisdiction but “none of the victims has made a case to warrant investigations”.