Microfinance Institutions Network says the continuous announcement without a road-map by the Bank of Ghana for a clean up in the microfinance sector will further decrease the investor confidence in the sector.
Executive Director of the Network Yaw Gyamfi in an interview of Joy FM said they are yet to receive an official letter from the Central Bank on the impending exercise.
"This thing will happen but the form and nature of it nobody knows, we are not sure when this whole process will take off and how it will end, that is where the fear lies, honestly if tomorrow morning when they come out and we all know exactly what is going to happen i think that is going to allay our fears, yes we will still have some loses and some gains at some point but we have to marry the two and see where we can actually take this whole process."
Explaining some challenges facing the sector, Yaw Gyamfi added that "it is a mix of all issues, it is not just from one angle, from the part of the regulators the supervision wasn't keen on the microfinance people, even from the microfinance point of view they also had issues with the module they were operating."
The finance ministry has also released about GH¢1 billion to aid the cleanup of the microfinance and rural bank sectors. According to reports the funds were released earlier this month for the project.
Gov't secures money for Microfinance sector clean up
The government in May this year disclosed that they have secured the funds that the Bank of Ghana (BoG) requested to be able to clean up the operations of Non-Bank Financial Institutions (NBFIs) and make them more solid to be able to support economic growth meaningfully, the Minister of Finance, Mr Ken Ofori-Atta, has disclosed.
The ministry recently ring-fenced the GH¢700 million in an escrow account, pending the completion of “some logistical arrangements” to allow for the actual clean up exercise to begin, the minister told the Daily Graphic in Accra on May 6.
Although Mr Ofori-Atta did not say whether the central bank would begin with the Microfinance Institutions (MFIs) or the savings and loans companies (S&LCs), the two set of financial institutions that are the apex of the NBFIs subsector, he assured the public that the government and BoG were “almost ready” for the much-talked-about clean up of the NBFIs subsector to begin.
When asked about the specific date that the exercise would commence, the minister said, “we are yet to meet and decide on that but in terms of preparedness, we have the money ready.”
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