President blames BoG for microfiance fiasco

Accra, Feb. 25, GNA – President John Dramani Mahama Thursday blamed the Bank of Ghana (BOG) for the proliferation of microfinance companies, some of which have swindled Ghanaians of their fortunes.

He said the lack of effective supervision on the part of the BoG deprived unsuspecting customers of their life earnings, commiserating with victims with a call on Parliament to fast track the Ghana Deposit Protection bill to protect small depositors who invest in such funds.

In a State of the Nation address to Parliament, the President expressed unhappiness with the Central Bank for exhibiting poor supervision that resulted in the scam by the rogue microfinance companies, tasking the BoG to take the necessary steps to ensure that those who lost resources recovered their investment.

‘These microfinance companies come under the direct supervision of the Bank of Ghana.

‘Unfortunately, lack of effective supervision on the part of the Central Bank has resulted in many cases where microfinance companies licensed by the Bank have breached the rules of procedure they were supposed to follow and have created supposed pyramid schemes that eventually came crashing down,’ the president said in the address that lasted for about three and half hours.

The President, a former representative in the House for the Bole/Bamboi Constituency in the Northern Region, used the address, which was a Constitutional mandate under Article 67 of the Constitution, to commiserate with his former colleagues and the family of the murdered legislator, Joseph Boakye Danquah Adu and the families of the victims of the Kintampo accident last week that claimed over 70 lives.

He commended the medical staff of the Kintampo hospital and all other hospitals where the victims were sent for their quick response to the tragic event in spite of their logistical constraints.

President Mahama said government was concerned with the DKM issue, where depositors have lost a whopping GHC 77 million, saying that Ghanaians need to be insulated from such scams by a more robust and supervisory regime by the BoG.

‘Government has a concern for the poor unsuspecting clients,’ he said.

The President responded to a voice from the Minority side calling for the dismissal of the Governor of the BoG saying he (President) cannot fire the Central Bank Governor because Bank of Ghana Act which was passed by Parliament had made that institution autonomous.

However, he gave the assurance that government would ensure that the culprits are brought to book.

President Mahama said the impunity of the microfinance would not go unpunished.

For the past five years, there has been a mushrooming of microfinance companies, who usually offer relatively higher interest on deposits, and this has attracted unsuspecting clients to withdraw their investment from regular commercial banks into the higher returns on deposits offered by the microfinance institutions.

The customers of Brong Ahafo-based DKM Microfinance Company are incensed because the DKM finantial institution managed to convince them of over 45 percent returns on their investments quarterly. This assurance made many people deposit various amounts of money in the Bunco bank.

But to the chargrin of customers, the DKM’s offices were empty and locked when their investments matured and it was time for the company to redeem its obligation to clients.

Many depositors have lost their life-long savings as a result of the scandalous operations of the company.

The Ghana Deposits Protection legislation when ratified would permanently sanitise and restore the credibility of the microfinance sector and strengthen the BoG’s supervisory role.

President Mahama’s address which was listened to by Members of the Diplomatic Corps, the religious community, traditional leaders, security agency chiefs, political party heads, a cross section of Ghanaian, featured what he called ‘evidence based accounts’ of his stewardship.

The address touched on interventions made to improve the quality of education, health, agriculture, infrastructure, including improvements in the road network, was supported with people who stood up and waved in appreciation of the social interventions being pursued by the government.

The minority, however, heckled the President as the cameras were thrown on some beneficiaries of some of the social interventions mentioned by the President.

The President announced that government has launched a Teacher Professional Development programme to train teachers across the country in other to enhance the professional skills of about 95 percent of teachers at the basic level by 2020.

Also, government has distributed ICT logistics to some schools to train teachers in ICT. Over 30,000 teachers are expected to benefit from the initiative.


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