EOCO Opens Fire On 30 Microfinance Institutions

The Bank of Ghana, (BoG) has given assurance that it will deal ruthlessly with directors and shareholders of microfinance finance companies found to have diverted depositors’ funds or engaged in fraudulent activities.

JoyBusiness sources within the central bank confirmed that the Economic and Organised Crime Office (EOCO) and the Securities and Exchange Commission (SEC) are currently investigating some 30 microfinance firms over alleged embezzlement and fraud.

BoG has, however, assured that depositors funds are safe, as it moved onsite and EOCO continues its investigations.

The onsite and offsite visit by the regulator is part of moves to monitor the recapitalisation of microfinance institutions in the country, which showed that these institutions could not meet depositors demand for their funds.

The problem which has persisted over a period got the regulator to move in and stop these 30 institutions from collecting fresh deposits as EOCO was commissioned to investigate what these funds had been used for.

Preliminary investigations showed that these funds were diverted by the directors and shareholders into other businesses, a source said.

Currently, over 4,000 customers, including some asset management and insurance firms risked losing savings and investments to the stumbling microfinance companies.

The involvement of some asset management and insurance firms who are said to have invested investor’s funds in some of these microfinance companies have triggered the Securities and Exchange Commission (SEC) to initiate investigations after initial meetings with the Bank of Ghana on how these funds can be recovered.