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31.05.2019 Business & Finance

Fear Grips Microfinance Operators Ahead Of Clean Up Exercise By BOG

By Clement Akoloh
Dr. Ernest Addison, BOG Governor
Dr. Ernest Addison, BOG Governor

Following the closure of some indigenous banks by Bank of Ghana’s Banking sector review, the announcement to carry out a clean-up exercise in the microfinance sector is sending shivers down the spine of some microfinance operators in the country.

The Bank of Ghana has indicated that it will begin a massive clean-up exercise in order to strengthen the microfinance industry after successfully supervising the banking sector reforms through what it claims have made the sector more robust to withstand any shocks in the financial sector.

About 1 billion dollars has already been released to kick start the process. However, the central bank has requested for a little more time to put things into perspective before they begin the clean-up exercise.

However, the operators in the sector are gripped with fear about the manner and way it will be carried out.

The Executive Director of the Ghana Microfinance Institutions Network, Yaw Gyanfi, in an interview says they have not received any information on the upcoming exercise so far and that is a source of worry for his members.

He said, “This thing will happen, but the form and nature of it nobody knows. We are not sure how this whole process will take off and how it will end. That is where the fear lies. Honestly if tomorrow morning they come out and we all know exactly what is going to happen, I think that will allay our fears”.

Mr. Yaw Gyanfi highlighted the challenges the microfinance sector having been battling with.

He urged the central bank to be circumspect in the management of information regarding the upcoming exercise, in order not to dampen the confidence of customers in the microfinance sector.

Meanwhile, a Banking consultant, Nana Otuo Acheampong has urged the central bank not to rush into the planned clean up exercise in the microfinance sector.

He also allayed fears that the exercise may reduce customer confidence just as the banking sector reforms did.

According to him, the shocks in this process will be mitigated by the fact that the people already been sensitized enough.