The Bank of Ghana (BoG) yesterday published a list of ninety seven unlicensed entities engaged in financial lending services.
According to the BoG, it had observed the persistent operations of unlicensed entities that were engaged in the provision of loans through mobile applications to the Ghanaian public.
This act, according to the Central Bank, was in contravention of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). The Chronicle applauds the BoG for taking this action, and it shows that it is up to the task.
The Bank reiterated that the activities of these entities significantly breach customer data and privacy laws, as well as consumer protection requirements and norms, with unfavourable implications on the integrity and wellbeing of their patrons.
These unlicensed bodies are able to ‘steal’ staff phone numbers in order to text them to come for loans.
With the Ghana Card being linked to our bank accounts, phone sims and driver’s license among others, it is incumbent on the government to enhance infrastructure and digital capacity, as well as cyber security.
The operations of unlicensed financial companies have been a major challenge in the last few years, with investors sometimes losing huge sums of money.
These unlicensed entities grant loans to customers through electronic platforms with higher interest rates. It is a good thing that the BoG has partnered the security agencies to crack down on them. A lot of ignorant people have fallen victim to this.
People look for loan entities online, sign up with all their credentials in order to apply for a quick loan, and these entities end up having access to all their private information.
The Chronicle is happy that the Bank of Ghana has promised to take action against these entities, in collaboration with the relevant state agencies, to promote the integrity of financial service delivery.
The general public should desist from doing business with unlicensed loan providers. Banks, Specialised Deposit-Taking Institutions and Payment Service Providers are cautioned not to facilitate the illegal transactions of unlicensed loan applications.
The general public is also encouraged to patronise the various types of digital credit products approved by the Bank of Ghana and delivered by banks and specialised deposit-taking institutions, in partnership with mobile money operators.
These loan facilities are accessed remotely through mobile money wallets without the need for collateral, and adheres to the relevant consumer protection and data privacy laws.
Ghana’s economy, like many others, is still recovering from the impact of the coronavirus pandemic. Despite this, the mobile money industry in Ghana enjoyed a big boost during the pandemic.
Ghana launched one of the first interoperable systems in Africa, which allows transactions between different telecom service providers in Ghana.
We have been identified as one of the biggest mobile money markets in Africa and this is where the BoG should up the ante to protect the digital financial space.
The Bank of Ghana should not go to sleep after the publication of the list of unlicensed entities engaged in financial lending services because there are a lot of susceptible people out there who will easily fall prey to these illegal activities.
In fact, with the emergence of digital financial services it is about time government intervenes with policies to protect people who want to take advantage of digital financial services.
The Chronicle is also using this platform to advise people to stay away from these unscrupulous financial institutions, because when their money gets locked up, the government cannot help them to have their money refunded. A word to the wise…
