Loan defaulters caused collapse of microfinance companies – Universal Microfinance CEO

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The Chief Executive Officer (CEO) of Universal Microfinance has attributed the collapse of several microfinance companies to the failure of customers to settle loans taken from the finance institutions.

According to Kwadwo Amofa Fofie, some of customers took huge loans but failed to settle them on the agreed dates and this became bad debt to the microfinance companies.

“The failure of some customers who took loans from these microfinance companies can be attributed to the failure of some of their customers to settle loans they took from them…,” he said on Angel 102.5FM’s Accountable to the People hosted by Kwadwo Dickson.

The Bank of Ghana (BoG) in 2019 revoked the licenses of 300 microfinance companies and 39 microcredit or money lending companies.

BoG announced that the action was taken pursuant to section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

The collapse of the microfinance companies has largely been attributed to lack of proper management but Amofa insists that the loan defaulters ought to be blamed for this as well.

He further said some workers employed in microfinance institutions also stole from their employers huge sums and this contributed to the collapse of these microfinance companies.

“A notification on our platform shows that some workers of some microfinance companies have recently duped their employers…workers duping the microfinance companies also caused the collapse of some of these microfinance…,” he said.

Source: Ghana | Angelfmonlinegh.com | KWAKU NTI

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