BoG praised for clamping down on dubious financial institutions

•   Frontage of Bank of Ghana head office in Accra.

• Frontage of Bank of Ghana head office in Accra.

The management of Wenchi Rural Bank, has commended the Bank of Ghana (BoG), for taking steps to close down financial institutions that are operating in Brong-Ahafo without valid licenses.

According to a Ghana News Agency report, the bank noted with concern the sudden mushrooming of about 15 “ponzy schemes” in the region, whose unscrupulous activities had become a headache for many of the traditional rural banks.

For instance, people are tricked to transact businesses with some of these dubious micro-financing companies, which were using unsustainable profits on deposits to deceive customers only for them to lose everything later.

Addressing the 3rd annual general meeting of the bank at Wenchi, Yaw Odame-Darkwa, Chairman of Board of Directors said, the illegal financial institutions were able to entice more customers by giving interest rates from 150 per cent and 200 per cent.

“Even though their operations are unsustainable, the unsuspecting public withdrew their hard earned deposits and invested in these get-rich-quick scheme,” he said.

Mr. Odame-Darkwa therefore appealed to the National Security Council to facilitate effective collaboration between it and the BoG to avert re-currence of such unsustainable micro-finance businesses.

He observed that such illegal financial operations threaten national security.

Mr. Odame-Darkwa said a similar situation in Albania some few years back led the country into civil war when depositors lost their investments in a “ponzy scheme”.

On the banks performance, the chairman said its total asset grew from GH¢6,783,296 in 2013 to GH¢9,859,054 in 2014, an indication of 45 per cent increment.

The bank also recorded a profit after tax of GH¢202,244 in 2014 as against the 2013 figure of GH¢185,599.00, he added.

Mr. Odame-Darkwa said the bank’s share capital stood at GH¢320,545 in 2014 as against the previous year’s figure of GH¢168,165.00, a 90 per cent increment, adding that as at August 2015, its total capital stood at GH¢976,545.00.

He announced the bank’s intension to pursue prudent policies to maintain its provision of excellent services to customers, stating that it would raise additional GH¢15,000,000.00 from depositors, the alternative stock market and private equity funds.

This money, Mr. Odame-Darkwa explained, would be used to expand the Bank’s micro-finance program-me to rural women and also expand its direct payroll deduction loan portfolio.

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