Rural banks to support MASLOC disburse micro credit

Rural and community banks want to be directly engaged in the disbursement of government loans to small and medium scale businesses.

The Micro Credit and Small Loans Centre (MASLOC) is set to advance money to new beneficiaries under the scheme.

But managers are still considering the mode of disbursement, following wanton abuse of the credit facility, which is offered at concessionary interest rates.

MASLOC was established in 2006 to manage micro finance schemes introduced under the second phase of Ghana’s Poverty Reduction Strategy to grow the private sector.

High default in loan repayment is however crippling the scheme and denying other small-scale entrepreneurs access to credit.

Officials of MASLOC are considering several options to recover over GH¢5 million from loan defaulters.

The Public Relations Officer, Mustapha Abubakar told
Luv FM that, despite several notices, most defaulters have refused to settle their indebtedness.

He said MASLOC will publish names and pictures of individuals and groups who owe the scheme in the dailies.

The secretariat is currently collaborating with the police in a final negotiation with defaulters in Accra and later other regions, whilst seeking means to disburse new funds.

The Senior Credit Manager of Atwima Kwanwoma Rural Bank, William Asamoah Abatia believes it would be ideal for MASLOC to channel the funds through the rural banks.

He said, “when the funds come and the bank is supposed to follow its laid down procedures of granting loans, it becomes very easy to disburse. You are not under any influence, you just do the right thing and this makes recovery very easy”.

However, there are concerns about an increase in interest rates should the banks disburse the loans. According to Mr. Abatia the rural banks are better placed to administer pro-poor credit interventions.

by Kofi Adu Domfeh