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Fraud alert BOG tips on how to spot fraudulent microfinance companies

" There are only 518 licensed microeconomic companies lincensed by the Bank of Ghana. We publish the list on our website."

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Governor of the BOG, Henry Wampah play

Governor of the BOG, Henry Wampah

The  Bank of Ghana  has disclosed to Pulse Business that it will publish the list of all microfinance institutions that are licensed with the Bank.

This according to the bank, will help expose unlicensed microfinance companies that are operating illegally. This will also equip customers with the  knowledge of which microfinance companies to do business with. According figures from the Bank official investigations reveal over 100 unlicensed microfinance companies.

The Central Bank, last week, closed down ten microfinance companies for operating without a license.

Head of Supervision at the Bank of Ghana, in charge of Other Financial Institution said, in an exclusive interview with Pulse Business that  " There are only 518 licensed microeconomic companies licensed by the Bank of Ghana. We publish the list on our website."

Mr. Amanfo added that the Bank of Ghana is considering publishing a more revised list. " Even the 518 licensed ones need to be revised, because we have those operating under provisional certificates who have not acquired the subtantive licenses."

The Bank of Ghana closed down  Care For Humanity International, Buoyant Investment Limited, God Is Love Fun Club, Perfect Business Fun Club, Perfect Edge Group, L.P.M Eye Adom Fun Club, Creative Fun Club, Little Drops Helping Hand Association, Financial Giants Fun Club and Great Winners Fun Club.

Mr. Amanfo emphasized some considerations customers must look at before investing  their money with a microfinance company.

Bank of Ghana License

He charged customers to insist on inspecting the company's license to operate as a microfinace company by the Bank of Ghana.  The license must be signed  by the governor of the Central Bank. He pointed out that the signed license is different from a provisional approval letter. The latter is a mere letter given at the provisional stage, after this stage the company must acquire the necessary license.

Be sure on the location

Customers must insist on knowing where the company's offices and management are located, especially when dealing with the company's agents. " Customers should not be happy just giving out money to collectors without knowing where and who the money is being taken to"

Identity of top management

  Find out who owns the company, and who makes up the board.

"Senseless" interest rates

  Head of Banking Supervision in charge of Other Financial Institutions cautioned against being lured by bizarre, higher- than- usual interest rates. This, he says  are symptomatic of fraudulent microfinance companies.

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