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Parliament has expressed displeasure with the Governor of the Bank of Ghana, Dr Henry Kofi Wampah, for failing to act adequately in protecting investments made in DKM Microfinance and other similar institutions.

Members of both sides, particularly from the Brong Ahafo Region, which was worst hit by the financial fiasco,  minced no words in telling Dr Wampah that the central bank fell below expectation in its supervisory and monitoring role in the microfinance sub-sector leading to the loss of customers' investment that run into millions of Ghana cedis.

Dr Wampah last Tuesday appeared before the Parliamentary Committee of the Whole at the invitation of the Speaker, Mr Edward Doe Adjaho, to apprise the House of the extent to which the apex bank of Ghana had been involved in the execution of its mandate with regard to microfinance companies.

Background

DKM microfinance company and four others, namely Little Drops Financial Services,  God is Love Fun Club, Jaster Motors and Investment Ltd and Care for Humanity Fun Club, which turned out to be bunco institutions, took deposits from clients,  paid huge unsustainable interests on the deposits and later bolted with clients'  investments when the companies became insolvent.

This situation is reported to have negatively affected economic, social and political life of the people in the Brong Ahafo Region resulting in reported deaths, marital problems,  a halt in farming activities and the hooting at and driving away of two ministers of state from some locations in the region.

The House had earlier invited the Finance Minister, Mr Seth Terkper, to brief it on the matter during which it was revealed that the Bank of Ghana had been lax in exercising its assigned supervisory and monitoring role to nip the looming threat of the financial fiasco in the bud.

President John Dramani Mahama,  in his State of the Nation Address, a fortnight ago, blamed the central bank for the disaster experienced by investors as a result of the distress of the fake financial institutions.

Dr Wampah's submissions

Dr Wampah said the central bank had engaged the services of an accounting firm, Pricewaterhouse Coopers, to assess the value of assets of DKM microfinance before it could start the liquidation process and pay off depositors.

On the other institutions,  he said,  their assets had been frozen but noted that some had begun paying the depositors.

He said there were currently about 500 microfinance institutions and added that the bank had increased its capacity to supervise them.

"We have employed additional people and we have created a separate department that looks after them and rural banks and so on. We are computerising them  and the first 150 will go on the system very soon so we will be able to monitor them more effectively and take action promptly.

“We are also pleading with members, we have two bills with you;  the Specialised Protection Institution  Bill and the Deposit Protection Bill," he said, and urged members to expedite action on those bills to further empower the BoG to supervise the institutions.

He said the microfinance institutions were different from the banks and added that even before they got the final licences some of the institutions were taking deposits from the public.