Patrick Nyarko, a former banker has said the collapse of the insolvent microfinance institutions by the Bank of Ghana is good for Ghana’s economy.
He said the economy thrives on a sound financial sector therefore if steps are not taken to address the problems in the scetor the entire economy will be negatively affected.
The BoG has, on Friday, 16 August 2019, revoked the licences of 23 insolvent savings and loans companies and finance house companies including GN Savings and Loans belonging to businessman Dr Papa Kwesi Nduom.
The Central Banks's action was taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.
The Bank of Ghana has also appointed Mr. Eric Nipah as the Receiver for the specified institutions in line with section 123 (2) of Act 930.
Speaking on the Ghana Yensom show on Accra 100.5FM hosted by Kwabena Prah (The Don) on Monday August 19, Mr Nyarko said: “Out of the 23 institutions collapsed about 14 of them were already not functioning and so it was good that the BoG took the action.”
The policy analyst added: “All around the world governments act swiftly to address issues in the financial sector because of the important nature of the sector. If you joke with the financial sector you are joking with your entire economy.”