Since the telecommunications firms (telecos) started offering mobile money (MOMO) loans, some of their consumers have abused the opportunity.
While some borrowers used the loans to launch or recapitalize their businesses, others improperly accessed the money, which contributed to their inability to repay.
To prevent the telcos from tracking them, they have ceased using their SIM cards in their quest to evade detection.
The amount owed to the telecos is not yet known, but sources claim it is in the millions of Ghana cedis.
The Bank of Ghana (BoG) has therefore recommended people who have defaulted on mobile money loans to try to pay back their debts for their own benefit.
The bank claimed that most customers believed they could avoid paying back a mobile money loan by deleting their SIM card after receiving one.
But according to Godfred Cudjoe, head of the BoG’s credit reporting unit, all borrowers of mobile money loans had their information stored with the Credit Reference Bureau, and “this could damage you in the future when you desperately need a loan.”
He advised against thinking that a mobile money loan is free money or that you can get away with borrowing and discarding your SIM card.
He claims that the Credit Reference Bureau, which keeps tabs on people’s credit worthiness, has information on anyone who has taken out a mobile money loan.
All banks do a search at the Credit Reference Bureau on all of their customers before giving a loan facility to them, according to Mr. Cudjoe, who was speaking at a financial literacy course for employees of the Ghana Immigration Service in Kumasi.
He clarified that this was done to make sure the borrower didn’t have a history of payment defaults.
He stated it may be difficult to get fresh loan facilities if it was discovered that someone had missed payments on prior loans.
Regarding investments, Mr. Cudjoe advised the attendees to exercise caution while putting their money in the hands of any financial organization and to avoid being seduced by what he called the mouth-watering profits being provided by those institutions.
He urged people to be aware of any investment firm that had a history of promising returns on investments that were higher than the going rate for the market or Treasury bills.
“The riskier the investment, the larger the returns,” he remarked.
According to him, the bank’s long history of complaints made the training necessary.
He stated that statistics revealed that security agencies were the main targets of Ponzi schemes and suggested that this might be because of their ignorance of the financial industry.
The goal of the training was to inform the staff about the roles played by the various types of banks as well as their rights and obligations while interacting with financial institutions.
In order to lower the interest rate in the nation, he urged the staff and Ghanaians in general to try to negotiate their interest on their loans.
He argued that customers have the right to negotiate the interest rate and that if they started using this right, interest rates might decrease. Chief Superintendent Joshua Mensah Ayettey, the Ashanti Regional Accountant of the GIS, expressed gratitude to the central bank for setting up the training for them.
He claimed that the training had opened their eyes to new information and some of the techniques used in the banking industry.
