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Bad Economy And BoG Are Responsible For Mess Of Microfinance Companies - Dr. Amoako Baah   
 
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14-Jan-2016  
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Dr. Richard Amoako Baah
 
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A Political Scientist at the Kwame Nkrumah University of Science and Technology (KNUST), Dr. Amoako Baah has blamed the DKM financial misappropriation on the poor economic management of government and layback approach of Bank of Ghana in its dealings with microfinance companies.

He explained that DKM succeeded in messing up people’s money because Bank of Ghana only took interest in charging fees to register the microfinance companies without coming out with measures to supervise the operations of such institutions.

The Bureau of National Investigations (BNI) arrested four operators of microfinance companies operating in the Brong Ahafo region where customers’ investments have been locked up for months.

The companies which have reportedly held their customers’ deposits ‘hostage’ for several months due to their closure by the Bank of Ghana, are DKM Diamond Micro-Finance, God is Love Fun Club, Jastar Motors and Investments Company Limited, Little Drops Association, Care for Humanity and Eye Adom Fun Club.

The arrested people are Martin Kuudening Delle, Managing Director, DKM Financial Services; Noel Nortey, Nkoranza Branch Manager of God Is Love Fun Club; Charles Asum, Managing Director of Jastar Group of Companies and Monica Afriyie, popularly called Maame Korkor, Managing Director of God Is Love.

President Mahama in a meeting with the media instructed that properties of operators of DKM Microfinance and other microfinance institutions in the Brong Ahafo Region are to be confiscated, sold and the proceeds used to defray the monies of customers that have been locked up in these institutions.

But reacting to the issue, Dr. Richard Amoako Baah on Okay Fm’s Ade Akye Abia Morning Show said the microfinance institutions are unable to work to satisfy their customers due to high interest rate they have to pay anytime they go for loans at the banks.

According to him, instead of the 24 percent on treasury bills by government directive, the banks have raised it to 32 percent for fear that the microfinance companies will not pay on time; hence the microfinance companies are forced to put 60 percent interest on the loan they give out to their customers.

“The truth is that not all the microfinance companies are fraudsters though some steal their customers’ monies, the microfinance operators are in trouble and it is extending to the commercial banks due to the poor economy. It is not entirely mismanagement of the microfinance….interest rate on treasury bills are too much for them to work with; Bank of Ghana should heavily be held responsible for the DKM mess in Brong Ahafo for not supervising and giving measures to curtail the activities of the microfinance operators,” he asserted.
 
 
Source: Daniel Adu Darko/Peacefmonline.com.gh/E-mail: [email protected]
 
 

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