New Microfinance Policy in the offing
The government is collaborating with the Ghana Microfinance Institutions Network (GHAMFIN) and the GIZ to develop and implement a national microfinance policy to re-align microfinance activities with the country’s development objectives.
The policy, which is set to replace existing regulatory frameworks that are considered inadequate and not responsive to the needs of Microfinance Institutions (MFI) in Ghana, will focus on re-emphasizing the social mission of the industry while creating the conditions for its supervisory framework to function.
Mr. Sampson Akligoh, Director of Financial Sector Division (FSD), Ministry of Finance, made this known at the maiden edition of the Microfinance Forum organised by GHAMFIN and held on the theme, “Microfinance Development in Ghana: Historical Perspective, Policy, Regulation and Future of the Industry.”
The FSD Director, who was represented by Mr Andrew Ameckson, Head of Banking and Non-Banking Unit of FSD, said the development and adoption of the policy would enable the industry to sustainably provide timely, diversified, affordable and dependable financial services to the low-income population in an integrated financial ecosystem.
“In the absence of a clear strategic guidance, most actors are behaving purely like private MFIs, providing services reminiscent to traditional commercial banks and thus, leaving a huge part of the low income and poor population out,” he said.
In line with recommendations from a recent diagnostic study of the regulatory framework of the Specialised Deposit-Taking Institutions (SDI) sector, he called for the amalgamation of the industry associations into one body with a mandate to effectively represent the industry at both regulatory and policy levels.
He, therefore, said it was important for industry players to establish GHAMFIN, an umbrella organisation of seven MFI associations, to serve as the apex association and strengthen its structures.
“Government engagement with the industry over the years has been rather limiting due to its fragmented nature.
“It is always easier to work with the banks because of the Ghana Association of Banks. It is also easier to work with the rural and community Bank because of the ARP Apex Bank. It should therefore be easier to work with the MFI sector,” he said.
He also noted that funding had been made available under the Financial Sector Development (FSD) project to develop the Micro Finance and Specialized Deposit-Taking institutions to enhance the circulatory and supervisory framework, promote consolidation and reduce regulatory arbitrage.
Professor Samuel Kobina Annim, Government Statistician, urged MFI to stick to its core mandate of catering for the poor in society by making finance available to people who needed it to work and grow out of poverty.
He raised concern over the high concentration of MFI with few to no branches in the rural setting where their support was needed most.
He attributed the phenomenon to the lack of essential service in those places, which hindered the ability of such MFI to flourish in those areas.
Going forward, he called for the development of a settlement policy that would factor the provision of essential services and amenities in the development of new settlements.