Foreign investors are looking to invest over US$50million in selected Micro Finance Institutions (MFIs) in the country, Executive Director of the Ghana Microfinance Institutions Network, Yaw Gyamfi has said.
“The investors who are expected to come in the country from October to December are ready to invest up to US$50million each and will look for MFIs who have strategically positioned themselves,” he said at the 6th Annual General Meeting of the Ghana Association of Microfinance companies in Accra.
Currently, there are 545 licensed Non-Bank Financial Institutions (NBFIs), made up of 467 microfinance companies, 67 money lending companies and 11 financial non-governmental organisations.
Aside these, there are 415 individual susu collectors and 346 individual money lenders whose activities are monitored indirectly by their apex associations.
“These investors have been working with us for a period of time. What they are coming to do is basically to tell us their revised strategies in entering into the market. In fact, couple of years ago they have been in and out but what they were offering was too much when it comes to microfinance. For instance, most of them have a minimum point of entry as US$1million which will be too much for an institution like a microfinance, but now lot of these investors have revised their notes.
For instance, one of these investors is to start with microfinance companies depending on your performance and size, they may start with 200,000 euro and then grow it as and when you can absorb the excesses. So, that is the way we are looking at it and all of them want to be in for period of 3months and have an open forum, and try to talk to microfinance institutions just to make sure that they can get clients in Ghana,” he said.
Sampson Akligoh, Director of Financial Sector Division of the Ministry of Finance, said the objective of the MFIs is to serve as an instrument for deepening financial inclusiveness across all subsectors of the financial sector and also provide a coherent context for the operation of financial institutions working at the bottom of the pyramid, and serving the poor and financially excluded.
He said the Ministry of Finance has developed a draft Financial Inclusion Strategy which seeks to increase the proportion of persons accessing financial services from 58 percent to 70 percent by 2022, thereby harnessing the potential of finance as a toll for poverty reduction, growth and development.
The Central Bank is currently instituting measures to ensure the stability of the microfinance sector.
Some of the measures under implementation include the increment of minimum capital requirement from GH¢500,000 to GH¢2million to be met by 2018; and the training of managers of these institutions on proper corporate governance structures.
The others are the introduction of penalties for non-complying companies; tightening of the prudential guidelines, increased public education and awareness creation; strong visibility of the BoG in the regions with the establishment of monitoring offices with MFI departments; and the recent passage of the Deposit Protection Bill.
Source: B&FT
