Ghana's microfinance institutions 'need better supervision'
Microfinance institutions in Ghana have been encouraged to work with the Bank of Ghana to develop the country's financial industry.Microfinance institutions in Ghana have been encouraged to work with the Bank of Ghana to develop the country's financial industry.
Franklin Belnye, acting Head of the Banking Supervision Department at the Bank of Ghana, discussed the matter at the annual general meeting of the Ghana Association of Microfinance Companies (GAMC) recently, the Ghanian Chronicle reports.
He explained these organisations are an important part of the nation's economic development as they offer credit to the poor and encourage more people to become entrepreneurs and set up small businesses.
However, there is currently little supervision in the sector and many unreliable microfinance firms are being allowed to establish themselves - something that needs to change.
Furthermore, just 350 institutions out of around 3,000 are registered as members of GAMC.
To tackle the issue, Mr Belnye said the Bank will begin issuing licences to genuine organisations so that they can carry out their operations legally.
According to data from Mix Market, there were 240,777 active borrowers in Ghana in 2010, taking out loans worth $91.9 million (£70 million).