Deputy Governor of the Bank of Ghana (BoG), Elsie Awadzi, has said many Savings and Loans Companies that collapsed in 2019 had flouted key regulations before their licences were eventually revoked.

According to her, many of these companies were given licences when the requisite due diligence had not been conducted.

“Many of these companies were operating without regulation for a while before they were brought into the system.

“Upon being licenced, they came with the practices that they were engaged in before – no rules, no man’s land – they had become used to that,” she said.

She made the comments on Tuesday, 13 October 2020, at a programme to sensitise the media about the use of accurate reportage on the financial sector.

The media sensitisation event brought together key players in the sector and presented a rare opportunity for the SDI associations to better explain their operations to the media.

It also enabled the media to ask appropriate questions of the key players in the sector and provide feedback to SDIs as to what the public thinks of their service.

She said even though the Savings and Loans Companies had been licenced, they continued to operate largely without complying to the rules and the regulations that applied to the businesses.

“They had very poor management in place, very poor internal control systems, very poor record-keeping…and it appeared that the interest of the depositors was not on their minds meanwhile they operated with depositors’ funds

“A number of Saving and Loans and finance houses also strayed away from their mandate under the licences that the Bank of Ghana had issued to them and tried to operate as commercial banks,” she said.

The Bank of Ghana revoked the licences of 347 microfinance companies and that of 23 savings and loans and finance house companies in 2019, citing insolvency, mismanagement, and fraud in some cases.

The exercise was part of the financial sector cleanup by the central bank, which also saw some eight banks losing their licences between 2017 and 2019.