[ 2016-07-15 ]

Bank of Ghana

BOG chases ‘fake’ microfinance companies in the Volta Region
The Bank of Ghana has said it is liaising with
security agencies to bring to book some
microfinance companies in the Volta Region who are
said to have swindled investors of their monies.

A statement from the BOG’s Communication
Department said though they have not registered
such facilities, they are “liaising with law
enforcement agencies to trace and bring the
perpetrators to book.”

Some residents of the Volta Region who were
victims of a microfinance scam during the
beginning of this year, 2016, on Thursday
threatened to boycott the general elections if
government fails to assist them to retrieve their
monies.

Customers expecting to make huge returns on their
investments from companies including ‘Little
drop’ investment club, ‘Prosperity and Good
Health’ club and ‘Clear Image Investment’
could not recover their investments as owners of
these firms cannot be traced.

This comes on the back of attempts by customers
of DKM Microfinance company whose investments have
been locked up in the company after several
unsuccessful attempts to retrieve their monies
failed.

The BOG in the statement further urged Ghanaians
to transact business with BOG approved financial
institutions.

Below is the full statement

RE: AGITATIONS BY CUSTOMERS OF ‘MICROFINANCE’
COMPANIES IN THE VOLTA REGION
Reports that some companies operating illegal
microfinance companies in the Volta Region have
succeeded in convincing customers to part with
various sums of money have come with grave
concerns.

The Bank of Ghana wishes to state among others
that:

Little Drops, Prosperity and Good Health Develop
Winners, Royal Foundation Global Leads, Royal
Care, Marceph Wealth, JODEQ Network Clear Image
and Divine Rain are NOT licensed and regulated by
the Bank. Hence, the Bank had no control over
their operations or interest payment promises to
clients.

Clearly, as unlicensed institutions engaging in
deposit mobilisation or any other activity akin to
banking they were in breach of Section 4 of the
Banking Act, 2004 (Act 673).

The Bank deems the activities of the
aforementioned companies, as reported, as purely
fraud disguised as some form of banking business.

The Bank is liaising with law enforcement
agencies to trace and bring the perpetrators to
book.

A number of unlicensed operators of similar
schemes in the Volta Region have been apprehended
in the past and reported to the law enforcement
agencies.

Little Drops, Prosperity and Good Health Develop
Winners, Royal Foundation Global Leads, Royal
Care, Marceph Wealth, JODEQ Network Clear Image
and Divine Rain adopted clandestine movements that
made them known only to their clients who were,
perhaps, lured by the high interest promise.

They have ceased operations and now cannot be
traced by those who knew where they were.

The activities of private companies and
individuals who deceive the public with phoney
money schemes are of great concern to the Bank,
for which reason tighter surveillance activities
have been introduced.

But as a collective responsibility to check the
activities of such criminals, the general public
should please report to the BoG or the Ghana
Police any institution operating without a licence
or where they believe licensed institutions may be
breaching the laws and regulations governing the
conduct of their business.

This will assist the BoG, in partnership with
security and law enforcement agencies, to take the
appropriate and timely corrective actions to
prevent further damage to the financial system.

In the meantime, the public is advised to observe
the following:

Do business with only licensed institutions in
the country, by first inspecting their licence
which must be displayed in their banking halls.

When in doubt, members of the public have the
right to confirm with the BoG the licence status
of any company. Further information is available
at the BoG website (www.bog.gov.gh) and all Bank
of Ghana Regional Offices or call the Bank on 0302
66 5252.

As an indication, all licensed microfinance
companies by the BoG would include the word
‘microfinance’ in their registered name.

Deposits made at an unlicensed institution are at
the risk of the depositor and as such the
Government or BoG will not be responsible for such
deposits.

Be cautious when dealing with companies offering
abnormally high interest on deposit.

Any savings interest rate which is abnormally
higher than Government Treasury Bill rates should
be a signal that the potential risk is high.
Remember the rule of thumb- the higher the return,
the higher the risk.

Source - citifmonline.com

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