Shine Your Eyes! Bank Of Ghana Says These 10 Micro-finance Banks In Ghana Are Fake

Fraud cases are not alien to the banking industry in Ghana and the proliferation of unlicensed micro-finance companies and fun clubs that promise high and unsustainable interest rates to customers is becoming a worrying issue in Ghana. Meanwhile, in a crisis-laden economy like ours where businesses are suffocating as a result of low productivity as a result of these incessant power outages, everyone expects the mother of all financial institutions, the Bank of Ghana, to play its oversight role effectively. But, happenings in the financial world steeply contrast the otherwise policing role the bankers’ bank (Bank of Ghana) is expected to play. However, she recently lived up to expectations when she identified some 10 unlicensed micro-finance institutions operating in the country and has warned the public to desist from doing business with any of them. The institutions identified are:

  1. Care for Humanity International
  2. Buoyant Investment Limited
  3. God is love Fun Club
  4. Perfect Edge Group
  5. Perfect Business Fun Club
  6. P.M. Ey3 Adom Fun Club
  7. Creative Fun Club
  8. Little Drops Helping Hand Association
  9. Financial Giants Fun Club
  10. Great Winners Fun Club

These companies are operating in Wa, Sunyani,Techiman, Nkoranza, Koforidua, Ho, Brekum, Bolgatanga, Kete Krachi and Dambai.

According to BOG, it is not responsible for the liabilities that may arise from the activities of such companies as their operations are contrary to section 4 of the Banking Act 2004:

A number of microfinance institutions seem to equate visibility with viability and have embarked on some branch expansion without the needed capital; thus putting customers deposits at risk. The public is therefore cautioned to desist from doing business with such unlicensed institutions.”

BoG’s Head of Other Financial Institutions Supervisory Department, Raymond Amanfu said other challenges facing the industry included poor loan recovery, resulting from the granting of credit to customers without proper credit appraisals, security and in amounts higher than prudential limits in a quest to increase income or profits.

He also accused the media houses of encouraging illegal activities of these unlicensed micro-finance institutions through advertisements. Mr. Amanfo said the bank is collaborating with Financial Intelligence Center and security agencies to track down, arrest and prosecute directors, shareholders and management of unlicensed institutions. “Henceforth the Bank of Ghana shall close any illegal institutions reported to be taking deposits, with the support of security agencies”. According to him, media houses that advertise these illegal institutions such as Fun Clubs and Associations for abetment of crime may also be included.

He added that the central bank will leave no stone unturned in clamping down on such illegal companies.