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Anomalies in microfinance institutions

Government has identified major anomalies in the microfinance institutions to the extent where 9200 savers whose funds of approximately $712,000 has gone missing.

The Attorney-General and Minister for Industry and Trade, Aiyaz Sayed-Khaiyum, made this revelation yesterday. Mr Sayed-Khaiyum during a press conference yesterday highlighted seven microfinance institutions which together contributed to the $712,000 unaccounted monies.

These findings came out following some initial queries into the microfinance institutions by the Reserve Bank of Fiji after there were some complaints received.
Mr Sayed-Khaiyum said this then led to a much focussed audit on these institutions conducted by the Ministry of Industry and Trade with assistance from the Ministry of Finance and the Auditor General’s Office.

In light of these audit findings, Mr Sayed-Khaiyum announced that Cabinet has approved the funding of these losses of savings to the individual account holders. “Government is going to step in and provide assistance to these 9200 people for the total sum of $712,000,” he said.

Legal framework

Mr Sayed-Khaiyum said Cabinet has also approved for a legal framework to be put in place regarding the governance of microfinance institutions.
He said the Reserve Bank of Fiji and the Solicitor General’s Office will be working on this together.

Mr Sayed-Khaiyum said the legal framework would be regarding the governance of microfinance institutions on the functions, credential requirements that should be in place to be able to manage these organisations.

He said this would be somewhat like the rules pertaining to banks and to insurance companies.
“There needs to be a set of rules in a transparent fashion for microfinance institutions,” he said.

Ministry’s involvement

Mr Sayed-Khaiyum highlighted the reason the Ministry of Industry and Trade got involved was because National Centre for Small and Micro-Enterprises Development used to for a number of years give grant to these microfinance institutions.

“But unfortunately, not withstanding those grants being given to those microfinance institutions, these institutions weren’t managed properly,” he said.
“The book-keeping was atrocious and as a result of which, a number of savers now totalling to about 9200 people can no longer can access those funds.”

Verification process

Officials from the Ministry of Industry and Trade are expected to go out into these communities identifying people specifically and verifying the actual account holders and the amount of money there are owed.

Mr Sayed-Khaiyum said they have already started in Kadavu, where the Prime Minister was there at the opening of the Telecentre and the Women centre.

The Permanent Secretary for Industry and Trade, Shaheen Ali, said the ministry has started its exercise to redress the problem and reimburse the savers’ funds that had been misused.

“There will be a public notice to advise the savers who had invested with the microfinance institutions and if their savings had been misused, they can now register with the ministry and their records will be verified,” he said.

“Once this is done, then the reimbursement exercise will start.

“In order to do that we need to get their details, their pass books, their IDs -Voter Registration cards, driving licence, other forms of identification.”

Mr Sayed-Khaiyum confirmed these matters would be referred to the police for further investigation.

(Source: Fiji Sun)