|Audio Attachment:Listen to Prez Mahama|
President John Mahama has clearly communicated to persons whose savings have been locked in DKM and other microfinance firms that government would not pay the tantalising interest they were promised.
Government has however directed the Bank of Ghana to ensure that “original deposits” of customers of the microfinance institutions closed down are paid.
DKM Diamond Microfinance Limited, God is Love Fun Club, Jastar Motors and Investments Company Limited, Little Drops Association, Care for Humanity and Eye Adom 'Fun based in the Brong Ahafo region were closed down by the Central Bank in January after they flouted Bank of Ghana’s regulations.
The firms allegedly duped their clients by deceiving them with over 50% interest on savings but ended up diverting depositors funds into personal projects.
A number of households were seriously affected by the closure with some dropping out of school, homes were broken, farmers could not farm and several businesses collapsed.
Delivering the State of the Nation Address Thursday, President Mahama largely blamed Bank of Ghana’s weak supervision for the mishap.
“There have been proliferation of microfinance companies over the past years…But unfortunately lack of effective supervision on the part of the central bank has resulted in many cases in which microfinance companies licensed have breached the rules of procedure they are supposed to follow."
He said the government was concern about the plight of “poor unsuspecting” clients duped by the firms.
Meanwhile, the Bank of Ghana has commenced liquidating the affected microfinance companies.
“This process should be part of a comprehensive package that looks at the protection of the livelihood of especially small depositors without rewarding the reckless conduct of the microfinance company, in this case DKM.
“The object of this exercise should look at reimbursing legitimate customers of their original deposit amount, not the ‘Alice in Wonderland’ profit that they hope to acquire,” the president underscored.
He also called for measures to sanitise the microfinance sector once and for all as he called on Parliament to “fast track the Ghana Deposit Protection bill which will protect the small depositors in funds like this.”
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