DKM saga has affected microfinance operation in Ghana - MLAG

The National Board Chairman of the Money Lenders Association of Ghana (MLAG) has revealed that the recent microfinance scam that hit the Brong Ahafo region and other parts of the country has affected the operations of microfinance companies.

Speaking at the launch of a 5-year strategic plan of MLAG in Accra, Regina Kumi said, the DKM scam has made a lot of people lose confidence in microfinance institutions due to the fear that they may end up losing their monies.

“Several persons have really lost confidence in the microfinance industry but we would work to restore that confidence and it is part of the reasons why we are launching this five year strategic plan,” she said.

Residents of the Brong Ahafo Region and the other regions of the country lost their investments after the DKM Microfinance, God is Love, Jastor Motors and other financial institutions were closed down by the Bank of Ghana.

Several attempts by the customers to retrieve their monies proved futile and this has led to the waning of public confidence in microfinance institutions.

But the MLAG Board Chairman maintained the association is poised to help strengthen the regulations on the operation of microfinance institutions to ensure they offer the best.

The five year strategic plan is also meant to also help provide the framework for the regulation of microfinance institutions in the country.

Objectives of the Strategic Plan spelt out at its launch include: helping build the capacity of the secretariat in terms of human resource development and logistics, building and maintain effective and reliable management information systems for the organizations as well as developing and implementing an effective monitoring and evaluation system.

Others include exploring access to sustainable and affordable funding, developing a comprehensive and log-term programme to build the capacity of members and embarking on a vigorous financial literacy programmes for clients.

Also states in the five year strategic plan, MLAG would liaise with the regulatory bodies to ensure compliance with regulations, check illegal operations and multiple borrowing; and also contribute to the establishment of a credit referencing system for the organization.