Ghana currently has 137 microfinance companies supposedly in good standing after about 347 of such institutions had their licenses revoked by the Bank of Ghana on Friday.
The central bank in a statement said the institutions whose licenses were revoked were either insolvent or had ceased operations.
The Bank of Ghana in the statement explained that new measures have been put in place to ensure that existing institutions remain structurally and administratively safe enough to continue with their businesses by complying with the norms.
Thirty-Nine (39) microcredit institutions also had their licenses revoked by the central bank.
Of the microfinance institutions affected, 192 of them were insolvent while the remaining 155 had folded up.
“Following the revocation of the licenses of these institutions, a total number of 137 microfinance companies will continue to operate. Going forward, the bank of Ghana has put in place measures to ensure that the existing institutions remain safe and sound by complying with relevant prudential norms,” the statement added.
The BoG also disclosed that, as part of the other measures put in place to prevent the revocation of licenses of the microfinance companies in the future, the minimum capital requirements for the sector will be reviewed upwards.
The BOG also announced strict supervision of licensed institutions and enforcement of the regulatory requirements as well as introducing a proportional corporate governance and risk management directives.
31 microcredit companies to continue operations
Following the cleaning of the sector, a total of 31 microcredit companies will also continue to operate after the revocation of 39 microcredit companies.
GHc900 to sanitise microfinance sector
The BoG had earlier indicated that it had secured GHc900 million to begin sanitising the country’s struggling microfinance sector.
About 705,396 depositors of distressed or collapsed microfinance companies and rural and community banks (RCBs) risked losing some GHc740.5 million without some form of intervention.
The Governor of the BoG, Dr Ernest Addison had also indicated that about GHc 7 billion will be needed for a full clean-up.