MASLOC chases loan defaulters

Micro-finance and Small Loans Centre (MASLCO) says it is in the final negotiation talks with the Bureau of National Investigation (BNI), Serious Fraud Office (SFO) and the Police to prosecute loan defaulters under the micro-finance and small loans scheme, beginning February, for retrieval of the loan.

A whopping GH¢81,846,875 is owed by defaulting beneficiaries under the scheme since its inception in 2004.

“We will go on rampage and proceed aggressively on loan defaulters, who have been indebted to the MASLOC since inception. This will include seizure of cars, taxis, and outboard motors as well as assets - and also prosecution of individuals to retrieve the monies,” Chief Executive Officer of MASLOC, Bertha Ansah-Djan, disclosed in Accra at a media interaction.

“We have contracted the SFO and BNI, Police and Lawyers to conduct comprehensive investigations for possible prosecution for the retrieval of the loans,” she said.

“MASLOC is facing formidable challenges and this situation is crippling the scheme, denying others access to credit,” she added.

Ms. Ansah-Djan said the target group of the scheme is the productive poor and that the MASLOC sought to empower those in that category financially in the short-term, adding that those engaged in petty trading, farming and sale of farm produce with added value are considered as the beneficiaries.

She blamed the previous administration for failing to follow due diligence in disbursing money to beneficiaries, citing weak institutional checks and monitoring as well as improper documentation of beneficiaries.

She said the administration also failed to use banks to disburse the money to beneficiaries, resulting in the big challenge of recouping the money from defaulters.

“We are now going to put in place measures to involve the banks to disburse the money,” she stressed.

The scheme has already signed a Memorandum of Understanding with some selected rural and community banks which are to be directly engaged in the disbursement of loans to small and medium-scale businesses. This will ensure proper disbursement and due diligence on clients by the banks before loans are disbursed to beneficiaries.

Ms. Ansah-Djan said the new administration will try to manage MASLOC as a business entity that will help alleviate poverty in the society.

B&FT gathered that as at 2008 about 279,000 micro entrepreneurs had benefitted from the micro-finance scheme.

The past MASLOC administration also left behind empty coffers, and serious financial improprieties which had left the Centre redundant the whole of last year.

MASLOC was introduced in 2004 by the previous government in conjunction with the World Bank, with nine new regional offices launched in September 2006, with seed money of US$ 50 million towards the establishment of a Micro Credit Fund to provide capital to Ghana’s micro-finance initiatives.

Under the Scheme individuals, groups and businesses were eligible to apply for loans between GH¢100,000 and GH¢250,000. Groups need have a minimum of five and maximum of 25 members to access up to GH¢250,000. Each member of the group could access GH¢10,000, refundable within one year with 10% interest.

Other categories who could access loans from GH¢20,000 up to GH¢250,000 attract the going Bank of Ghana’s prime interest rate.