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19 loan companies are operating illegally – BoG

The Bank of Ghana (BoG) has provided a list of 19 entities that provide lending services without central bank approval.

The BoG said the entities’ actions violated the Banks and Specialized Depository Institutions Act 2016 (Act 930).

The central bank has described these entities as “illegal” which mainly use mobile apps and social media in their activities.

Loan companies

Some of the entities providing unlicensed loan services from the Bank of Ghana include SikaPurse Quick Online Loan, 4Cedi Instant Mobile Loan Application, Zidisha Online Loans, GhanaLending, ChasteLoan Application, LoanClub-Ghana Instant Loan, AdamfoPa Loan and MetaLending-Instant Cash Loan.

Other unlicensed financial companies are Wohiasika Loan (Ghanaloan.net), Boseafie – Bosea Micro-Credit, SikaKasa Online Lending, LoanPro – Digital and Instant Loan, SikaWura Loan Application, BegyeBosea Loan and LendingPapa – Online Loans.

The others are CrestCash Loan, Credxter – Loans and Lease-to-Purchase, MobiLoan Application, Cedi Now – Cash Loans Application.

Data and Privacy

The Central Bank further stated that “the activities of these unauthorized entities constitute a failure to comply with consumer protection requirements and an abuse of customer data and privacy laws.”

“The Bank of Ghana is taking steps to take action against these entities and hereby advises the general public to refrain from doing business with all unlicensed loan providers.

In a statement, the BoG advised banks and specialized depository institutions as well as payment service providers not to facilitate illegal transactions by unlicensed loan providers.

Background

In August 2019, the central bank revoked the licenses of 23 savings and loan companies, as well as insolvency finance companies and appointed a receiver to manage their affairs.

“The Bank of Ghana believes that these institutions have no reasonable prospect of recovery and that their continued existence poses serious risks to the stability of the financial system and to the interests of their depositors,” the statement added.

These measures marked the end of a struggling savings and loans industry and other financial institutions that started in August 2017 and cost the government at least GH¢12 billion in bonds and cash to cover the depositors’ assets.

In terms of total assets, the largest financial corporations are non-banking financial institutions, which consist of savings and loan companies, finance companies, mortgage finance companies, and leasing companies. Together, they held assets worth GH¢11.4 billion at the start of 2019, representing just over 9% of total banking sector assets.

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