Prime News Ghana

Sit up and regulate Microfinance sector well - Economist to BoG

By Jeffrey Owusu-Mensah
Bank of Ghana
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The Bank of Ghana (BoG) must sit up and regulate the Microfinance sector, an economist, Gilbert Ibrahim has urged.

According to him, though "the Microfinance concept was seen as a mechanism to reduce poverty in the informal sector" by supporting "petty traders who are unable to access loans from the traditional banks", people were taking advantage of the lack of proper regulation and supervision to swindle unsuspecting customers.

Mr Ibrahim's comments come after some aggrieved customers of Nobel Dream Financial Services -a Kumasi-based Microfinance institution which has folded up- disclosed plans of going on demonstration iin order to retrieve their monies.

It will also be recalled that customers of DKM, another of the folded up Microfinance instituions, in Brong Ahafo Region attempted to stage a demonstration against President John Mahama at Sunyani during the launch of the NDC's 2016 manifesto because he failed to help them retrieve their monies and were only stopped at the last minute by the police through a High Court order.

The folding up of these bankrupt Microfinance institutions has made many call for their abolishment.

But speaking on Class FM's Executive Breakfast Show, Mr Ibrahim stated that, "for this economy to pick up, we need Microfinance institutions to build the informal sector [so] we should call on the central bank to sit up" and regualte the sector properly.

"The customers should not become victims as a result of the central bank's negligence", he noted, adding that, "ost of these Microfinance institutions must be closed down especially the unregistered ones."