Moneylenders ‘cry’ over BoG's GHC2 million minimum capital requirement; envision collapse

Moneylenders ‘cry’ over BoG's GHC2 million minimum capital requirement; envision collapse

- Moneylenders have appealed to the Central Bank to take a second look at the minimum capital requirement

- They argued that some of them operate in remote areas and do not need to necessarily pay GHC2 million to do business

- The fee increased from GHC60,000 to GHC100,000 and then to GH300,000 before being increased to GHC2 million

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The Ghana Micro Credit Association (GMCA) has appealed to the Bank of Ghana to review the current minimum capital requirement.

The GMCA explained that the GHC2 million required by the Central Bank before a money lender could legally operate in the country has led to a number of challenges.

It added that a refusal to review the fee would lead to a foldup of businesses of moneylenders, especially those in the remote areas., Business reports.

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GMCA’s board chairman, Wilberforce Ofori, noted that “Micro Credit institutions are helping a lot of people in one way or the other especially in the remote areas. That is why we are saying that for those in the remote areas they do not need a minimum capital requirement of Gh¢2 million.”

In August 2019, the Bank of Ghana revealed that microfinance institutions are required to provide a GHC2 million capital requirement by February 28, 2020, a refusal to do so which would result in sanctions.

Ofori noted that the new requirement reflects an increment from the earlier announcement of GHC300,000 after it was revised from GHC60,000 to GHC100,000.

In other news, details of the government’s expenditure on consultancy services in the year 2018 have caused a stir online.

A Ghanaian professor of law and accounting, Professor Stephen Kwaku Asare, better known as Kwaku Azar, released details of the expenses online.

In a post on social media that has since gone viral, he indicated that Ghana paid $204,325,225 for technical and management services in the year 2018.

This represents an over 400% increase as the country spent $39,946,317 on the same services the year before. "2018 was the Year of Consulting.

Your beloved country spent $204,325,225 on the payment of technical and management services. By way of comparison, $39,946,317 was spent in 2017.

The over 400% increase, we are told, is due to more consultancy services paid during 2018. I’d like to see a listing of the consultants, the nature and benefit of the consultancy, and value for money audit of each of those services. 128/1820 is a bona fide scam and sham."

READ ALSO: Egypt's Suez Canal generates over GHC2 billion in February 2020 alone

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