Savings and loans companies are hoping their gains in
the non-bank financial service sector will not be eroded by the excesses in
operations of microfinance firms.
Regulated activities under the Non-bank Financial
Institutions Act 2008, increased from a single tier to four tiers, to include microfinance
companies, Susu collectors, money lenders and Financial NGOs.
Savings and loans companies have traditionally operated
at the first tier.
As the sector becomes more competitive, microfinance
firms have been identified as potential threat to savings and loans companies,
especially in competition for clients.
But public
apathy arising from poor operations of some microfinance institutions (MFIs) is
a concern to market leaders. Some MFIs, in recent times have had to collapse or
entered liquidity challenges.
The major threat to the industry is building public trust
and confidence, stated Yaw Berhene Bonsu, Head of Legal and Compliance Unit at
FIRST ALLIED Savings and Loans Limited.
“When you have stories of microfinance institutions in
the past running away with customers’ deposits, there is the fear that as the microfinance
sector grows, with all these financial houses mushrooming, there might be a repetition
of businesses bolting away with customers hard earned deposits”, he observed.
Mr. Berhene Bonsu is however hopeful the regulator, Bank
of Ghana, will closely monitor the activities of the MFIs to boost confidence
in the industry whilst the savings and loans companies “will have the assurance
that the trust we have built with our clients over the period will not be
eroded”.
The Ghana Association of Microfinance Companies (GAMC)
has been seeking a mandate from the regulator to play a supervisory and
oversight role in the microfinance industry.
Collins Amponsah Mensah, National Chairman of GAMC says
such responsibility would empower the Association to inject disciple and sanity
among members.
Story by Kofi Adu Domfeh
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