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Parliament summons governor over DKM crisis
 
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29-Feb-2016  
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The Governor of the Bank of Ghana (BoG), Dr. Kofi Wampah, has been summoned by Parliament to answer questions relating to the DKM micro-finance saga.

The micro-finance company alleged to have invested GH₵77 million of its customers’ deposits in its subsidiary companies-KM Airlines Company, DKM Fuel Station, DKM Transport, DKM Shea Butter Company and DKM Mining Company, among others.

The Majority Leaders and Chairman of the Business Committee of Parliament, Alban Bagbin, announced this on Friday when he delivered the Business Statement for this week.

Last week, the House invited the Finance Minister, Seth Terkper, to brief the law makers on the operations of micro-finance companies in the country, with particular reference to DKM and four other micro-finance companies.

Mr. Terpker told the House that, the BoG had revoked the license of DKM and had commenced the process of liquidating its assets and those of the subsidiaries to pay off the depositors.

The law makers were dissatisfied with the explanation given and invited the Governor to meet them behind closed doors to give more details on the issue.

They want Dr. Wampah to explain plans being put in place to ensure that all the moneys deposited are adequately refunded.

Some members also want a bailout package from the government to support the depositors, most of them peasant farmers in the Brong-Ahafo Region.

DKM Financial Services is a micro-finance company with its herd office in Sunyani. It has six branches in Wenchi, Techiman, Bolgatanga, Wa, Berekum, and Nkoranza.

An investigation by the BoG revealed that the company engaged in bad financial practices in an attempt to attract deposits from the public.

DKM was collecting deposits from customers at an interest rate ranging between 40 per cent per quarter and 55 per cent for two months, which were unrealistic and unsustainable.

The company also persistently violated the provisions in Act 673 which limits borrowing and credit exposures.

Mr. Terkper had told the law makers that the interest rates offered by the micro finance company were not only unrealistic but also unsustainable.

He said DKM’s conduct threatened the safety of customer’s deposits and had the potential of adversely affecting banks, savings and loans companion, rural and community banks and other micro finance institutions operating in Sunyani and its environs.


 
 
 
Source: The Ghanaian Times
 
 

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