The National Chairman of the Ghana Association of Microfinance Companies (GAMC), Mr Collins Amponsah-Mensah, has said potential investors must undertake due diligence on microfinance companies before investing their resources with them.
He said although the association and the regulator – Bank of Ghana (BoG) – would continue to work to protect depositors from unscrupulous institutions, the ultimate responsibility was for the public to ensure the safety of their resources.
In an interview on May 2, Mr Amponsah-Mensah said “as a people we should come to the point and accept the fact that the safety of our resources is our responsibility”.
The public, he said, should be made to understand that when the BoG says it is regulating the institutions, it doesn’t mean that depositors should not do due diligence.
“It is their responsibility. They shouldn’t wait for someone to educate the public before they get to know that they can deal with this institution or not,” he said.
Public education
The association, he said, would continue to educate the public on licensed institutions as part of its ongoing campaign.
He said last year, when the DKM issue came up, the association did a lot of education, but two weeks ago, a Ponzi scheme came up and they had already registered close to 3,000 people.
“The public education will continue but the content of our delivery now won’t be this institution is good, this institution is bad. It is about how individuals can take responsibility for their own resources, and make sure that where they are taking it they have done the right due diligence,” he said.
The association and government, he said, would continue to let people know the range of investment returns on the market and caution customers to know that anything beyond those ranges warrants due diligence.
“If individuals decide not to heed that caution and still want to take those risks, and things don’t work the way they expect it, it will be very wrong to put the blame on the doorstep of an association or a network of Bank of Ghana,” he said.
Logo for licensed institutions
The microfinance association has initiated moves to introduce a common logo for all licensed institutions in the country. It has set a July 2017 deadline to do this.
This new logo, when it becomes operational, will show members who are in good standing and help differentiate between licensed and unlicensed ones.
“The idea of the common logo is to make identification easier so the public can differentiate between licensed and unlicensed institutions. There is going to be a public education but the first phase of that is to ensure that member institutions have the signage in place.”
“Once we have been able to complete that and the institutions have the signage, then you can tell someone that when you go out there, look out for this,” Mr Amponsah-Mensah said.
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