The Managing Director of Capital & More, Akosua Oduma Oppong-Tawiah, says the recent bunco scheme that rocked Ghana’s microfinance industry has dealt a big blow to companies in the industry.
She noted the fiasco, involving the popular DKM Microfinance Company and others including some fun clubs, has caused customers and investors’ interest in the sector to wane.
“Truth be told, it has been a very big blow to our industry…and we are all looking to see how it is resolved,” she told 3News, noting the situation has pushed a lot of responsibility on operators in the industry.
Mrs Oppong-Tawiahsaid the microfinance meltdown, which has caused thousands of Ghanaians including traders to lose their investment totalling over GHC100 million, has become a reference point for investors and customers.
Millions of cash deposits and investment of customers of DKM Microfinance, Jastar Motors, God is Love Fun Club, Perfect Edge and others who were operating savings, were shutdown by the Bank of Ghana (BoG) in 2015.
BoG’s action was prompted by the fact that these companies and many more across the country were operating in clear violation of the savings and banking laws and regulations.
Some of the companies were paying interest of up to 50 per cent on customers’ deposits and investments, something that raised eyebrows in the industry.
The meltdown has in the last year impacted negatively on businesses with some of them collapsing, particularly in the Brong Ahafo and the three northern regions where these companies operated.
Following hue and cry by the victims, BoG took steps to get DKM to refund their deposits through a liquidation process. Customers from this month begin receiving their monies.
But commenting on the development, Mrs Oppong-Tawiah, said: “some companies misappropriating people’s funds has waned trust for us so now…So we are deeply hurt. We’re really bruised as an industry.
“When you go out looking for investors to partner, it’s like there is a reference point that you have to now debunk and address so much so that some are just not ready to deal [with you] until the existing problems come to a logical conclusion,” she observed.
These customers and investors, she explained, always want to satisfy themselves that their investment will not go down the drain as happened to others in the microfinance crisis.
“We can’t blame them. We all learn from our mistakes so we have to be more patient now and try to win [their] trust. It hasn’t been easy but we have to engage more,” Mrs OppongTawiah told 3News
Microfinance still relevant
Notwithstanding, she has made a strong case for the legitimate microfinance companies like the Capital & More who are helping to make life better for Ghanaians, especially the unbanked in the informal sector of the economy.
“We’re still here; we’re still being regulated so you cannot just rubbish the whole industry,” she stated, adding “there is a market that we need to serve, there is a mandate that we have to fulfil so we have to stay alive to see it come through”.
She observed there is a huge population of traders in the informal sector who are not being served by the various universal banks, hence the importance of micro finance companies in Ghana.
“We need to relook at it and focus on our core business and our core mandate and just do just that and I’m sure that we will do well,” she said, noting that she has taken it upon herself to crusade to restore the glory of the microfinance industry.
By Stephen Kwabena Effah|3news.com|Ghana