Fast expanding microfinance companies dangerous- Microfinance Network

They are most likely financing the expansion with their depositors' monies. This is wrong, and makes it difficult to pay but their depositors monies and the promised interests.

 

The executive director of  the Ghana Microfinance Institutions Networks (GHAMFIN) has charged the Bank of Ghana to police the tendency of microfinance companies to hastily expand their branches.

The director made this call on the premise that many microfinance companies in the country expand the number of branches using the  deposits of their their customers.

Speaking on Radio Univers' Business Discussion Program, , Mr. Yaw Gyamfi  said

The executive director further lauded the Central Bank for the way it is has dealt with the DKM Finance case.

Mr. Gyamfi disagreed with criticisms from the microfinance industry that the Bank of Ghana has been unfair to the customers of DKM finance.

Customers of DKM have vowed to make the Brong Ahafo Region a living hell for government officials in the region if the Central Bank does not release their investments to them.

Meanwhile, Mr. Gyamfi argues that the Bank of Ghana is taking the right steps to safeguard the interests of the customers.

He has however disagreed with the increment of the minimum capital requirements for microfinance institutions from GHC500,000 to GHC2 million. He has argued that not all microfinance companies need that amount of money to operate due to differences in market sizes.

In related development, has been finding out the role microfinance companies play in the financial ecosystem of the country.

David Kumi, an investor with a micro finance institution and a student of the University of Ghana says, his microfinance company presents him with more convenience and ease than a commercial bank would.

Executive director of the Ghana Microfinance Institutions Network, Yaw Gyamfi on his part said, microfinance companies fill a void in the un-banked sector that fully-fledged microfinance companies do not.  He however concedes that a lot policing is needed to rid the system of rogue microfinance companies.

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