BoG partners with security agencies to crack down on online loan firms with high-interest rates

The Bank of Ghana is partnering with security agencies to crack down on more than 90 unlicensed entities granting loans to customers through electronic platforms with higher interest rates.

The Assistant Director, Fintech and Innovation Office of BoG, Clerence Blay said due to the higher interest rates on the loans, some of the borrowers are unable to settle their debts.

According to him, a number of entities have been identified by the BoG.

When asked why none has been arrested so far if a number of them have been identified, Mr Blay said: “The security agency is responsible for the arrest. We are working with them and the process is ongoing.”

He added that “we do not want to put information out there which may undermine that operation.”

Operation of unlicensed financial companies has been a major challenge in the last few years with investors sometimes losing huge sums of money.

The BOG’s Fintech and Innovation office is concerned about how online platforms have become the new means such companies transact business.

According to Mr Blay, per the laws of Ghana, an entity must be licensed by the Bank of Ghana before acting as a credit provider.

He explained that, in lending there are a number of risks, making it vital for the regulator to deal with those risks.