The Bank of Ghana (BoG), the country’s central bank, reportedly is cancelling the licenses of and shutting down microfinance institutions (MFIs) that are engaging in practices such as: (1) charging interest rates in excess of government-mandated limits; (2) transferring operating licenses among organizations; or (3) changing their publicly recognized business name repeatedly in order to mitigate any effects of the firm’s poor reputation among current and former customers. According to a statement attributed to Mr Raymond Amanfu, the head of the central bank’s Other Financial Institutions Supervision Department, which oversees MFIs in the country, the department will no longer approve firms’ requests to change their names.
In other efforts to strengthen the industry, the capital requirements for new petitioners for microfinance licenses have been increased to GHS 300,000 (USD 79,000) for non-deposit-taking firms and GHS 500,000 (USD 240,000) for deposit-taking firms. The additional capital requirements for existing firms are GHS 100,000 (USD 26,000) for firms with five branches or fewer and GHS 200,000 (USD 53,000) for firms with larger branch networks.
Sources and Additional Resources
Ghana Web: http://www.ghanaweb.com/GhanaHomePage/business/artikel.php?ID=321850
Joy Online: http://www.myjoyonline.com/business/2014/August-19th/bog-bar-mfis-from-name-change.php
MicroCapital, August 13, 2014: Bank of Ghana Demands Photos of Owners of Microfinance Institutions to Deter Theft of Deposits
MicroCapital, July 12, 2014: Bank of Ghana Decides Not to Limit Number of Microfinance Licenses, May Raise Capital Requirements
MicroCapital, March 21, 2014: Bank of Ghana Licenses 394 Microfinance Institutions (MFIs), Donates Equipment to Trade Associations
MicroCapital, January 30, 2014: Bank of Ghana to Limit Number of Operating Licenses for Microfinance Institutions (MFIs)
MicroCapital Universe Profile: Bank of Ghana (BoG) Wiki
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
Similar Posts:
- MICROCAPITAL BRIEF: Patasente Agricultural Trading Platform Accesses Credit Line Via Verdant Capital for Onlending, Invoice Discounting in Uganda
- MICROFINANCE PAPER WRAP-UP: “Green Energy Finance and Gender Disparity: The Case of Mountain Areas in Bangladesh,” by Sakib Bin Amin et al, Published by Copenhagen Business School
- MICROCAPITAL BRIEF: Equity for Tanzania, New Holland to Lease Tractors to Small-scale Farmers
- MICROCAPITAL BRIEF: Yabx Raising Equity to Expand Backoffice Fintech for Financial Inclusion in Nigeria
- MICROCAPITAL BRIEF: Mogo Kenya Borrowing $7m from Verdant Capital Hybrid Fund to Boost Vehicle Ownership