Don’t deal with unlicensed loans companies
The Ghana Association of Savings and Loans Companies (GHASALC) has cautioned patrons of financial services to desist from dealing with unlicensed loan companies.
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The President of the association, Dr Emmanuel Osei Owusu, was worried about the increasing spate of fraud in the industry by some unscrupulous loan companies.
Speaking in an interview at the sidelines of a training workshop organised by Beige Capital and GHASALC in Accra yesterday, Dr Owusu was concerned that the lack of proper education among non-bank financial services’ patrons had increased the perception that both savings and loans and microfinance companies operated on the same level. The workshop was to help improve the operational sustainability of savings and loans companies through business- to-business networking.
Quoting relevant rules to support his argument, he said, “People contemplating to take loans must beware and cross-check if they are duly authorised. I will advise them to look at the banking licence but we also note that most of the people who deal with the non-bank financial institutions are illiterates so we will have to really educate our customers.”
Bank of Ghana Regulation
The Bank of Ghana issued new operating rules and guidelines to regulate microfinance institutions in the country, in pursuance of the provisions of the Non-bank Financial Institutions Act, 2008.
Categorisation of regulated activities under the Act increased from a single tier to four tiers, to include susu companies, susu collectors, money lenders and financial NGOs. However, savings and loans companies have traditionally operated at first tier.
Under the guidelines, the activities of individuals and companies that engage in savings and loans and microfinance have been categorised into four tiers. This divides the different types of loan operators according to the capital they are required to have.
The guidelines cover co-operative saving groups, locally referred to as ‘susu’ companies, money lenders and financial non-governmental organisations, which operate outside the supervision of the banking regulator.
Loan companies
Some loan companies choose to remain anonymous and which should be enough warning that they are unregistered and unlicensed.
Notices from most of them that have emerged only provide telephone numbers and no other details.
Some people deposit money with them and take loans from these companies mostly when they are under stress, so they do not think of the consequences until they are required to pay back or need their money.
The Chief Executive Officer of BEIGE Capital, Mr Mike Nyinaku, said savings and loans companies played a major role in the delivery of financial services in the country and that they were the immediate link between the very informal banking sector and the formal sector.
“Most of the informal sector still lack access to basic financial services because they are unable to relate to the traditional banks as would corporate institutions. We are still the predominant deliverers of financial service so it is important that we come together to affirm our position and get the regulator to speak to our needs,” he said. .