Central Bank Also Blamable For Fraudulent Micro Finance Companies

Currently there is in the system uncountable member of micro finance companies. A brief study into the situation shows that these companies emerged due to the upsurge of businesses wanting to obtain financial assistance that are often difficult to access in our traditional banks. Some of these companies provide mouth watering services that beat the imagination of many Ghanaians.

However most of these new financial institutions though not properly registered have used the succulent services given to their clients to defraud some of their clients In Accra and all the major towns in the country there are reported cases of officials of micro finance companies who have vanished with hundreds of thousands of cedis belonging to their clients. Some of the financial institutions have closed down their businesses.

The low interest rate that some microfinance companies purport to charge, sometimes as little as five or eight per cent, is a calculated gimmick that has caused many unsuspecting clients more harm than good, Economic Tribune has established.

This is contrary to the wishes of the World Bank and other donor agencies that lend billions of dollars to enable microfinance service providers dish out soft economic empowerment loans.

Some clients of microfinance companies interviewed regretted joining the microfinance schemes, saying what had at first seemed a good prospect of extricating themselves from abject poverty, ended in misery after losing valuable property.

Investigations conducted by CITY & BUSINESS GUIDE have revealed that some microfinance institutions operating in the Sekondi-Takoradi are collapsing as a result of their inability to sustain their operations.

The investigations also revealed that customers with huge deposits with the institutions could not get their monies as the owners could not be traced. The paper learnt that some institutions have failed to raise the requisite funds to pay the customers.

The paper gathered that ROGAI and Royal Winners Micro Finance companies operating in the Sekondi-Takoradi metropolis folded up recently and were believed to have bolted with clients' savings running into thousands of Ghana cedis.

Bank of Ghana's intention to close down all unregistered micro finance companies is a good move. However the central bank cannot be absolved from blame. While these new banks were operating the central bank had the responsibility of finding out the true status of banks through monitory and evaluation of the micro finance companies. The new clients of the new micro finance companies are also blamable for what they have gone through in the hands of the illegal micro finance companies.

The clients of the new finance companies must be guided by the activities of defunct Pyram and R-five which managed to dupe Ghanaians in the past Iin Accra. The new micro finance companies began as happened when Ghanaian rushed to establish Forex Bureaus, communication centers, internet cafes and small scale mining companies.

These are established by copy cats who feel they can make instant fortunes in the new companies. Henceforth forth those establishing these companies must endeavor to register them properly and work in according to the companies laws. The regulating companies should also use their monitoring and evaluation arms properly by checking to find out how companies are faring. This way all new companies including the micro finance companies would live up to expectation.

EANFOWORLD FOR SUSTAINABLE DEVELOPMENT
Box 17070 ARN
ALHAJI A ABDULAI [email protected] /[email protected] 233 20 8844791 /