MCAG calls for stronger measures to curb loan defaults

THE Executive Director of the Microcredit Association of Ghana (MCAG), Mr Ebenezer Quartey, has described non-performing loans (NPLs) as a major threat not only to microcredit institutions but also to the wider banking and financial sector.

He has, therefore, called for stronger credit appraisal, monitoring and loan recovery mechanisms, as well as effective measures to address wilful defaults, including the consideration of criminal sanctions where deliberate or fraudulent conduct is established.

Mr Quartey made the call at the 17th Annual General Meeting (AGM) of the Association in Ho yesterday, on the theme: ‘Driving Progressive Microfinance Sector Reforms: The Role of Delegated Supervision and Regulation’.

He stressed that borrowers who honoured their loan obligations should not be disadvantaged by those who deliberately refused to repay their loans.

Mr Quartey explained that, in line with the association’s strategic plan and the evolving regulatory environment, management would focus on seven priority areas: regulatory and supervisory excellence, affordable funding, the Synergy Fund, membership growth and member value, digital transformation, capacity building and professionalism, and advocacy and strategic partnerships.

He urged members to comply strictly with applicable regulations, pay their subscriptions promptly, participate in the Association’s programmes, provide reliable industry data, invest in staff development, adopt appropriate technology and support the Association’s regulatory, supervisory and advocacy mandate.

The Board Chairperson of MCAG, Mr Benjamin Turkson Jnr, said microfinance remained important to financial inclusion and national economic development.

However, he noted that the industry faced a challenging environment shaped by regulatory reforms, technological changes, credit recovery difficulties and the need for affordable funding.

Mr Turkson said the AGM’s theme was timely, given the growing importance of governance, regulatory compliance and consumer protection in sustaining confidence in the financial system.

He mentioned that MCAG had an important role to play in supporting the regulatory framework and working constructively with the Bank of Ghana.

He added that delegated supervision could strengthen compliance and monitoring if supported by clear mandates, appropriate standards, adequate capacity and accountability.

Mr Turkson announced that the Association recorded total income of GH¢3.534 million in 2025, compared with GH¢2.725 million in 2024, representing an increase of approximately 29.7 per cent.

A lecturer at the Ho Technical University (HTU), Dr Daniel Agbeko, said the financial sector was undergoing significant transformation, with digital financial services expanding and small businesses demanding more reliable financial services.

He said communities unable to access financial support from traditional banks relied largely on microcredit institutions to grow their businesses, particularly farmers, artisans and traders.

Dr Agbeko urged microcredit service providers to embrace technology, saying digital platforms, including mobile money and electronic record-keeping systems, could help expand access to financial services and improve operational efficiency.

He added that staff of microcredit institutions needed to upgrade their skills continuously to remain relevant and competitive in an increasingly technology-driven financial services industry.

BY SAMUEL AGBEWODE, HO

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