BoG urged to strengthen regulation of loan apps to protect borrowers

Cybersecurity analyst, Maximus Ametorgoh has called upon the Bank of Ghana to strengthen its regulation of loan applications, citing the potential risks faced by borrowers due to the proliferation of uncertified loan apps.

His recommendation comes in response to recent actions taken by the Bank of Ghana, which has cracked down on 97 loan applications found engaging in unlicensed lending activities, violating the Banks and Specialized Deposit-Taking Institutions Act, 2016 (930).

Mr. Ametorgoh in an interview with Citi Business News emphasized the need for collaboration between the Bank of Ghana, telecom service providers, value service providers, and app developers to ensure the safe operation of loan apps and protect vulnerable borrowers.

He asserts that individuals seeking loans often face economic pressures that lead them to explore digital lending options, without necessarily knowing whether these apps are certified or authorized.

To address this issue, Mr. Ametorgoh proposes that “the Bank of Ghana engages in dialogue with telecom service providers, value service providers, and app developers, establishing a baseline regulation that requires any payment platform, electronic money issuer, or loan provider operating on the internet to obtain approval from the central bank.”

By implementing this measure, any financial service available online would be presumed certified, ensuring that borrowers can make informed decisions without the risk of falling victim to unlicensed lending activities.

Additionally, Mr. Ametorgohsuggests the development of a short code or an app that individuals can utilize to verify the certification and legitimacy of loan apps.

This verification mechanism would provide borrowers with the necessary information to assess the credibility and compliance of these digital lending platforms, thereby mitigating the chances of fraudulent or predatory practices.