Compel microfinance companies to join association – BoG urged.

The National Board Chairman of the Ghana Association of Microfinance Companies, Mr Collins Amponsah- Mensah has urged the Bank of Ghana to make it mandatory for all microfinance institutions in the country to be members of the association.

This, he said will help the association to effectively monitor and regulate the operations of most micro finance institutions  and also help rid the industry of what he described as unscrupulous operators.

In an interview with the Graphic Business in Accra, Mr Amponsah- Mensah said as at end of the January 1, 2012, deadline issued by the Bank of Ghana for microfinance institutions to get licensed, the association had registered 362 new members while 150 operating institutions had applied for licensing to be regulated.

He observed that as a result of less coordination between the Bank of Ghana and the Registrar Generals Department regarding registration and licensing, the association could not play any major role in ridding the industry of illegal operators because they seem to be riding on the back of the freedom of association clause in the 1992 Constitution to avoid being registered as members of the association.

He also urged all members to embrace the idea of licensing as this would bring sanity and give credibility to the operations of the industry.

“We all need to embrace the idea and work closely with the regulator to make joining mandatory and make the work of the regulator very easy as well as that of the association,” he said.

Mr Amponsah- Mensah however said the association is also playing its role in getting more members to join the association and consequently obtain licensing from the Bank of Ghana.

He said “currently the association had set up two national secretariats in Accra and Kumasi to educate members and encourage other institutions to register with the association. We are also encouraging peer referencing among our members and monthly sensitisation meetings to encourage members to register.”

Commenting on whether the Bank of Ghana has hinted any further extension after the January 1 2012 deadline, he said there had not been any formal announcement but with the silence of the Central Bank on the issue he was sure the association could use that laxity to get more members to register.

“The Bank of Ghana understands the challenges associated with the registration and licensing as it takes time and the 6 months allocated was not enough,” Mr Amponsah- Mensah explained.

He added that the Rural and Agricultural Finance Programme (RAFiP) introduced by the Ministry of Finance and Economic Planning was a good initiative as it would enhance the capacity of most of these operators.

“Our industry, although new and not developed and exposed like other countries, is a specialized field that requires training to build the capacity of members,” he said.