The Criminal Investigations Department (CID) of the Ghana Police Service is still licensing money lenders in the country, three years after the Money Lenders Act (2008), Act 744 transferred the authority to license them from the CID to the Bank of Ghana. But the criminal body, which now finds itself perpetrating illegality, says it licences money lenders only to fill a void. Maxwell Adombila Akalaare reports
The Bank of Ghana says the Criminal Investigations Department of the Ghana Police Service has been engaging in an improper conduct of issuing operational licenses to prospective money lenders to operate in the country.
According to the BoG, it was now the legal responsibility of the BoG to licence the lenders for operations following the enactment of the Money Lenders Act, Act 744 (2008), three years ago.
Mr Franklin Benlnye, Assistant Director of the Banking and Supervision Department of the BoG, said at a stakeholders meeting organised by the Interim Management Committee of the Money Lenders Association in Accra that “what the police are doing (issuing operational licenses to prospective money lenders) is actually illegal but we (BoG) have turned a blind eye to it because we don’t have the needed structures and guidelines in place yet.”
But Superintendent Felix Mawusi who represented the CID director at the forum, said there was a vacuum created by the central bank’s inability to licence the lenders, a responsibility and right that the enactment of the Act transferred to it.
“I think there is a vacuum and we (the CID) issue licenses to the lenders to fill that vacuum. License (from the CID) is better than no license at all,” Superintendent Mawusi observed.
Mr Benlnye however, noted that the act of the CID still issuing licenses to the lenders would be rectified in the coming months.
“We are coming out with the needed guidelines and the legal frameworks to enable us take up that mandate,” Mr Benlny said.
As part of those modalities, Mr Benlny said the BoG would, on next Thursday, hold a meeting with the members of the MLAG to solicit their inputs for the various guidelines and framework being formulated by the BoG for the sector.
He hinted that the BoG was considering a startup capital of GH¢100,000 as minimum requirement for prospective money lenders, an amount the MLAG members at the forum said was too high for them to meet.
But Mr Belny??? said “these are some of the reasons why the BoG plans to meet you next week so that we can together iron out the differences and come out with the needed modalities for the sector.”
Stakeholders and experts in the lending business were of the view that the CID’s inability to supervise and do follow-ups on the licensed operators posed a challenge to the sector as well as the operations of the lenders themselves.
As a result, an Act of Parliament, Act 744 (2008) was passed three years ago which subsequently transferred the legal right of issuing operational licenses to individuals and institutions wishing to go into the business of money lending from the CID to the BoG.
The act was to, among other things, correct the lack of supervision and other operational difficulties after the CID had issued licenses to prospective money lenders for operations.
But three years after the passage of the act, the CID still issues licenses to the prospective money lenders on the blind eye of the appropriate body, the central bank.
The BoG currently licences and subsequently supervises and regulates the activities of all individuals and institutions wishing to engage in any financial related activity in the country.
According to the BoG, it lacked the necessary framework and modalities to enable it to leave up to the demands of Act 744 - issue operational licenses to prospective money lenders in the country.
As a result, the CID says it currently issues the licenses to fill that void created by the BoG’s inability to legally carry out its mandate.
The CID was given the authority to license money lenders in the country under the money lenders ordinance. Such a mandate was however repealed following the passage of Act 744 in 2008 which was meant “to sanitise the sector”.
Some of the participants at the forum observed that taking the authority to issue licenses from the CID to the BoG would mean double cost to incur in acquiring licenses since they would have to reacquire another license from the BoG.
It was attended by the association’s members as well as representatives from the Registrar General, BoG, Micro Finance and Small Loan Centre (MASLOC) and the Ministry of Finance and Economic Planning.
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