The Ghana Microfinance Institutions Network (GMIN) has called on the Bank of Ghana to encourage microfinance firms to merge as a way of guaranteeing their viability.
Currently, there are about 700 deposit-taking microfinance companies operating across the country. However, the recent microfinance scam that rocked the sector has led to tighter regulations with some calling on the central bank to further increase minimum capital requirement to force some operators out.
But speaking to Class News, the Executive Director of GMIN, Yaw Gyamfi, suggested there should be mergers to help reduce the number of players as well as ensure their sustainability.
“I think still the numbers are quite high and interests in some of these institutions are also very small so we anticipate that the central bank will also come in and give the kind of advice we anticipated. Let some of them merge, put some of them together to make it one institution, a big one that can serve the masses because if you have a GHS100,000 and you dish out your loans at some point, you will not even have money to pay your staff because a lot of people are looking for loans at that lower level but unfortunately the amount that we’ve been licensed with is quiet small, so we don’t get too many people accessing too many funds from the good ones and so we’ve been advising that they merge…” he stated.
Mr Gyamfi disclosed: “There is an ongoing programme where a foreign development agency for instance is supporting the microfinance companies to merge and then have bigger institutions and so we are working on that modality for the next three years to see how many of them we can put together as one institution and also to put their systems into proper order.”
Meanwhile, the GMIN has welcomed Bank of Ghana’s listing of financial institutions in good standing. According to the Bank of Ghana, only 385 microfinance institutions had regularised their activities as of July 31, 2016. Mr Gyamfi said the move was a wake-up call for the microfinance institutions.
Source: Ghana/AccraFM.com
