Pool Cash In Dormant Accounts Held By Banks In Ghana To Compensate Victims Of Fraudulent Microfinance Companies

The cynicism of some Ghanaian politicians never ceases to amaze one. Indeed, saying it is pretty hard to comprehend, is an understatement. Alas, it is precisely that cynicism, which afflicts so many of the members of our nation's political class, which is responsible for most of the difficulties our homeland Ghana faces.

In light of that particular failing of our political class, perhaps the question we must pose, as regards the plight of the latest victims of fraudsters in the microfinance sector, is: Why are some politicians seeking to exploit the terrible situation, faced by those unfortunate souls, who might eventually lose cash they deposited with a number of microfinance companies, in the Brong Ahafo Region?

Continuing agitation by those individuals who deposited cash in microfinance companies in the region, which are no longer operating - either because their promoters have disappeared with depositers' cash, or because their licenses have been withdrawn by the Bank of Ghana (BoG) - could escalate into violent protests eventually, if not handled carefully.

That is why it is vital that those irresponsible and shortsighted politicians, who should know better, but are now seeking to make political capital out of the misery of the protesting depositors, who stand to lose all their savings and investments in the affected microfinance companies, cease their unhelpful meddling - in what is a delicate and complicated matter.

Why do they not suggest practical ways a seemingly intractable problem can be resolved, without recourse to taxpayers, instead?

A good politician will always seek to find a positive way to help ordinary people in such situations  - instead of grandstanding and seeking to exploit, for political gain, what are the personal tragedies of distressed individuals: many of whom happen to be bread-winners of families that have to struggle daily to survive.

Why blame a government of the day, and the BoG, for a tragedy caused by the unwise decisions of depositors lured by the fool's gold prospect of near-impossible-to-deliver high returns, I ask?

All those despicable politicians, seeking to exploit the misery of the victims of the microfinance companies, which have closed down in the Brong Ahafo Region, should bow their heads in shame. They are nothing but vicious, power-hungry nation-wreckers, who care more about wielding political power, than helping the vulnerable in society.

What is needed now is for the banking system to find a creative way to make money available to bail out those who have lost their savings, without burdening taxpayers - for what were clearly unwise investment decisions taken by vulnerable individuals who perhaps allowed greed to cloud their judgement somewhat.

The question is: Why, when there were other reputable financial-sector entities such as universal banks in the Brong Ahafo Region, which they could have saved with, did those now demanding that the state should compensate them for losses resulting from the closure of the microfinance companies they saved with, choose to save with those particular microfinance companies, in the first place?

Did they not realise that investing in any business, including microfinance companies,  promising high returns, is always a risky undertaking? Tragic though the situation might be, the plain truth is that in the final analysis, it is the greed of individuals, which has led to this unfortunate crisis - not the failure of regulators.

What should society learn from this tragedy? Perhaps the time has now come for the banking industry in Ghana to collaborate with the Ghana Education Service to provide financial literacy classes from primary to tertiary level to equip young people in Ghana with basic knowledge about personal finance. Ditto the Ghanaian media.

And how can the banking system help resolve this crisis? Perhaps the easiest way for the banking system to come up with the money to bail out those defrauded microfinance company depositors in the Brong Ahafo Region (and elsewhere in Ghana), would be for the BoG to encourage banks in Ghana to pool all the cash held in  dormant accounts they hold, and make it available to enable the BoG bail out all those affected by the closure of microfinance companies.

Above all, alongside strengthening its supervisory role over microfinance companies, the BoG must also name and shame the directors of all microfinance companies, which  defraud their unwitting depositors, by suddenly closing down and disappearing - by publishing their photographs alongside the names of their microfinance companies in the print media.

It could deter many such crooks from setting up microfinance companies with the sole aim of defrauding depositors - as they will be identified by their neighbours, friends and relations when their photographs appear in the print media.

For now, pooling together the millions of cedis held in dormant accounts in all the banks in Ghana, could enable the banking system to provide the BoG with the money, to offer some compensation to all those who can provide documentary proof that they have indeed lost their savings with microfinance companies in the Brong Ahafo Region - and elsewhere in Ghana (should that decision be taken too by the authorities).

It is a simple and doable idea - if  banks in Ghana are minded to help resolve this unfortunate crisis of confidence in the microfinance sector of the national ecomomy's financial services industry. The work done by microfinance companies makes a huge  difference to the businesses of thousands of micro-entrepreneurs, such as market women,  across Ghana.

It is vital that no loss of confidence in them is allowed to occur -  because universal banks in Ghana failed to pool the cash held in dormant accounts with them to bail out those who lost money because of fraudulent microfinance companies. It is in the long-term self-interest of banks to help resolve this problem.  After all, is the next level in their expansion,  for successful micro-entrepreneurs, not almost always to bank with universal banks, I ask?