RE: Koforidua market women threaten demo against MASLOC

The attention of the Management of MASLOC has been drawn to a story in the Ghanaian Chronicle newspaper of Monday, 2nd March 2009 under the above caption and we wish to react accordingly.

In the said story, fire victims of the Koforidua Market who had applied for MASLOC loans were said to have threatened to embark on a demonstration to protest what they described as 'fraudulent treatment being meted out to them by authorities of the Microfinance and Small Loans Centre (MASLOC)'. The group was also said to have threatened to demand a refund of their loan processing fees paid to MASLOC.

Sometime last year twenty eight victims of the Koforidua market fire outbreak in January 2008 applied for MASLOC loans totaling GHC32,300 to help them revamp their businesses. As part of the application process they paid various sums of money as processing fees otherwise known as loss mitigation fees of 0.5% of the amount applied for. The total processing fee thus paid by all the 28 applicants amounted to GHC 161.50 (One Million, Six Hundred and Fifteen Old Ghana Cedis).

In the course of further processing of their facility, our internal due diligence revealed that twenty four of the applicants were among a group of forty traders who had benefitted from a similar facility granted jointly by the Ministry of Women and Children Affairs (MOWAC) and MASLOC to the tune of GHC40,000 in August 2008. At this point, we decided to suspend further processing pending further investigations to determine the accuracy of the information that had come to our notice.

Our investigations have further confirmed that 24 out of the 28 applicants did indeed obtain the loans from MOWAC, and that they are currently even two months behind schedule in their repayments.

In line with our operational procedures to ensure the sustainability of the MASLOC Scheme, borrowers are not entitled to new loan facilities until they have liquidated their outstanding loan obligations. To this end, we are unable to extend any new loans to the market women at this point in time. In response to demand for a refund of their processing fees, our Eastern Regional Coordinator was directed to refund the total processing fee of GHC 161.50 to the traders. Interestingly however, the traders have refused to take back the refund of GHC 161.50 saying that they are still interested in securing the loans.

We do however assure them that when they have fully paid up their existing loans, we will be ready to consider new applications for our facility alongside other outstanding applications.

With specific reference to the assertion in the newspaper that MASLOC officials had said on air that the fire victims had been paid their loans, we wish to state categorically that neither the Chief Executive Officer of MASLOC, Mr. Lawrence Prempeh, nor any staff member of MASLOC had stated anywhere, whether on radio, in the newspaper or any other forum for that matter, that the fire victims of Koforidua had been paid their MASLOC loans.

We wish to reaffirm MASLOC's commitment to the provision of affordable credit to the Micro, Small and Medium Enterprise (MSME) sector in a sustainable manner. In the same vein, we wish to assure all applicants whose loans have delayed to exercise restraint as steps are taken to meet the huge demand for our facility.

Signed PHIL CLIFF AYE-GATSEY EXECUTIVE HEAD, BUSINESS SERVICES