The Association of Rural Banks in the Ghana has appealed to Bank of Ghana (BoG)to institute punitive measures against what it described as very disturbing development in micro finance industry.
The association says it has noted with great concern the proliferation of micro finance institutions and non-bank financial institutions in the country especially, in the Brong-Ahafo region.
The mode of operations of the non-bank financial institutions the rural banks observe was inimical to the interest of the rural and community banks because their operations are not aligned with micro finance best practices in Ghana.
Rural Banks concept started in July 1976 as an institutional approach towards filling the wide gap of financial services that existed between the urban and rural communities.
Since its inception, the industry has seen exponential growth and can now boast 141 rural and community banks nationwide under the association.
Speaking the 9th Annual General Meeting of Bonzali Rural bank in Kumbungu, the National President of Association of Rural Banks, Dr Nana Akowuah Boamah said they are not happy about the fraudulent activities some Microfinance institutions springing up in the country.
The rural banks said if the Bank of Ghana failed to crack the whip on the non-bank financial institutions, their practices will jeopardize the indispensable rural financial intermediation that rural and community banks have built over the years.
Dr Nana Boamah has therefore entreated BoG to take immediate steps to clamp down on the activities of unauthorized institutions and have them close down.
But the Deputy Governor of Bank of Ghana, Dr Abdul-Nashiru Issahaku who was the guest speaker assure the association of BoG's commitment in dealing with the problem. Dr Abdul-Nashiru said BoG has taken active steps to address the situation as soon as possible.
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