‘Strict regulation of microfinance sector crucial’

The Bank of Ghana (BoG) has been advised to come out with a regulatory support framework to govern the operations of microfinance institutions in the country.

Ezekiel Owusu Afriyie, Chief Executive Officer (CEO) of Noble Dreams Microfinance Company, who made the appeal recently, said drastic changes must be made to the framework to save the microfinance industry from collapse.

In an interaction with journalists in Kumasi yesterday, Mr. Afriyie intimated that the microfinance industry needed the attention of government to get public acceptability.

The Noble Dream CEO said the present free entry into the sector was a potential threat to the growth of the industry, which handles a large chunk of the country’s economy.

He asked the Central Bank to prepare a draft supervision and protection code that would be adopted by all microfinance institutions for their operations.

There have been a lot of criticisms about the mode of operation of many microfinance institutions (MFIs) lately while there have been accusations of some who bolted away with customers’ deposits.

However, Mr. Afriyie noted that the MFIs have suffered a lot, especially this year, adding that the situation had compelled some of them to fold up.

“We can do better if proper regulations are put in place to govern our operations through supervision by the Central Bank,” he noted.

According to him, Noble Dream Microfinance Company was making plans to become a savings and loans company by the first quarter of next year.

The CEO disclosed that the company planning to bring on board investors for a smooth take-off, stressing that the company has met the BoG’s requirement to become a savings and loans company.

According to him, Noble Dream intends to venture into other areas of financial services such as insurance.

He thanked customers of the company for their unflinching support and loyalty, pointing out that the company has its infrastructure in place.

He disclosed that Noble Dream has 24 offices across Ashanti, Greater Accra and Western Regions with competent staff strength of 1,038.

The financial institution has advanced loans totaling GH¢48 million to over 500,000 customers.