The Bank of Ghana (BoG) has vowed to constantly monitor and review the business environment and enact laws or issue relevant guidelines that will ensure general satisfaction, thereby enabling the microfinance sector to become vibrant and sustainable.

The Central Bank will persistently dialogue with operators in the industry on strategic and operational issues with a view to safeguarding Ghana’s model of Microfinance to make it a global point of reference, Dr. Yaw Gyima-Larbi, Assistant Director, Banking Supervision Department-Bank of Ghana has said.

“The regulation of the sector will enable the Central Bank to define procedures for their operations, entrance and exit, and ultimately create an environment for fair competition and efficiency in the industry.”

Dr. Gyima-Larbi was speaking on the subject “The Growth of Microfinance Industry, Its Impact on the Economy” at 21st Annual conference of the Ghana Association of Business Education Teachers (GABET) in Sunyani.

He said regulation of the Microfinance Industry (MFI) is very crucial and necessary to maintain confidence in the financial system, adding that it will ensure competence of financial services providers, protect consumers, instil industrial sanity and guarantee effective credit administration, and stabilise financial markets among others.

According to him, the past global experiences as well as the current local pockets of unpleasant happenings crippling the industry have stirred the BoG to critically review the operations of MFIs with the intention of streamlining their operations to make them a vital instrument in the whole process of poverty reduction and growth.

“It is critical not to lose sight of the fact that for any system to function effectively and ultimately benefit society, it needs to be guided by laiddown rules and regulations. As entities such as Microfinance institutions penetrate our economy through the provision of services, there is a need for binding rules and regulations to bring about sanity and obviate any undesirable consequences that might be tied to the sector,” he emphasised.

Mr. Gordon Osei Marfo, President of GABET, on his part noted that in spite of the enormous role MFIs play in the economy and their desirability, some are only fraudster institutions.

“As we commend the genuine ones for their invaluable contribution to national development, I wish to appeal to them to reduce their interest rates in order to make their products more flexible to help alleviate the plight of the poor,” he said.

He therefore reiterated a call on the Central Bank to as a matter of concern institute pragmatic measures to weed-out unregistered MFIs or regularise their operations. This, he said, will help eliminate or at least reduce fraud on the unsuspecting public.

The Ghana Association of Business Education Teachers (GABET), founded 21 years ago, has the vision of offering high quality education in Business studies to students so as to make them disciplined and competent scholars as accountants, Business managers, teachers who will meet the job requirements in the ever-widening business world.