What was hidden in the names of defunct Microfinance companies?
By Doris Yaa Dartey. The WatchWoman Column
Microfinance in Ghana has become far removed from its humble and well-meaning origins in Bangladesh. Its pioneer, Mohammad Yunus’ clear intention was for microfinance to be used as an instrument to provide the balm of financial services to aid the unbanked poor who struggle at the bottom of the totem pole of deprivation.
A good thing can go wrong. Good things do go wrong when they are left to suffer free-falls. Microfinance in Ghana is a great thing that over time, and to a large extent, had gone wrong. The on-going melt-down has been a long time coming. The revocation of the licenses of 347 microfinance companies last weekend by the Bank of Ghana is a verdict of what had gone so wrong for several years.
Names say a lot! Going through the tall list of 347 microfinance companies whose licenses were revoked in an earth-shattering swoop on the over-sized murky industry, I became fascinated with several of the names. They read like a list of victims of a game gone bad.
BORROWED AND SIMILAR NAMES
Without displaying a grain of creativity, some business owners get on the “copy-copy” bandwagon by adopting known names. This tendency in Ghanaian entrepreneurship to show lack of creativity, and the knack to copy whatever others are doing that appears to be successful is pathetic. As soon as someone begins a certain business, others assume that it must be profitable so quickly set up similar shops, at times in the same vicinity!
A name may be borrowed with the clear intent of borrowing the accompanying benefits of name recognition and of association. A typical example on the list of 347 is Nationwide Microfinance. The first time I heard of Nationwide Microfinance, I wondered if the owner used to live in North America and borrowed the name from that part of the world where Nationwide Insurance is a major player in the insurance industry.
The similarities in the names of some of the failed microfinance companies is troubling. It was as if the clear intention was to confuse potential clients. If these company names are stacked against each other, you must be a super alert person to notice the differences.
The word Capital is the most used word in the names of the defunct microfinance companies; appearing in 34 of the 347 names. The intent might have been to attract their targets to patronize the companies and to grab some trading “capital”. I would not be surprised if most of the companies with the word capital in their names were registered about the same time when “capital” was the fad word!
“Connect Capital Microfinance Limited”and “Capital Connect Microfinance Limitedare both on the list. The only difference between them is in the mere arrangement of the two words—Capital and Connect! How does an average Ghanaian differentiate one from the other? I cannot!
The list also includes “All Ghana Microfinance Company” and “All Inclusive Microfinance Company”,both of which run amok in the microfinance industry. And then there are six companies with the word Cash: “Cash Multitrust Microfinance”,“Cashphase Microfinance”,“Cashplus Microfinance”, “Cashbridge Microfinance”,“Datacash Microfinance” and “LJ Cash Microfinance”.The names sound as if they belonged to a cash group of companies!
And who won’t be confused with “Tipping Point Microfinance”side-by-side with “Turning Point Microfinance”? Or of “Noble Dreams Microfinance” and “Big Dreams Microfinance”? Imagine if these look-alike sound-alike companies operate in the same market! Confusion galore! If “Crown Capital Microfinance”was pitched against “Crown House Microfinance”, would you know the difference? I wouldn’t!
Were these similarities errors in the list released by the BoG? Or the Registrar General outdid itself by registering sound-alike companies in the same industry? Shouldn’t differentiation in naming be a pre-condition for registering companies? How did the BoG supervise and regulate the maddening crowd of sound-alike names? Didn’t the BoG officials feel dizzy with the task? Clearly, Ghana went through a comedy of errors with the naming of microfinance companies.
RELIGIOUS FLAVOUR
As a super-Christian society, some owners hooked on to religion as if a microfinance company was an extension of church! There might have been a spiritual strategy behind this. For deeply gullible Christians, names with Christian undertones would get their attention.
The company name that tickled me the most is “Sweet Jesus Microfinance”.Also on the list are: “Christian Community Microfinance”, “Nativity Microfinance Services”, “Ebenezer Microfinance”, “Redeemer Microfinance”,“St Mary’s Microfinance” and “God is Perfect Microfinance”(which is reminiscent of the erstwhile “God is Love Fun Club Microfinance”– which proudly carried the flag that preceded this major collapse of microfinance companies).
But in the end, religion and the appeal to names and words associated with Jesus Christ did not save the collapsed companies. They have gone down the tubes with the secular non-religious names. Probably, “Eclipse Microfinance Limited”carried a prophesy!
STRATEGIC AND PRETENTIOUS NAMES
Some of the names reveal an irony, and were pregnant with lots of promises. Did the owners of some of the companies set out to deceive gullible clients? Was the intention hidden in the names—in plain view? Did the names of the companies impact on the acceptance of the companies by clients?
On the list are: “Expressway Microfinance”, “Fast Track Capital Microfinance”, “Multi Money Microfinance”, “Financial Republic Microfinance”, “Startwell Microfinance”, “Integrity Capital Microfinance”, “Giant Steps Microfinance”and “Advalue Microfinance”.
Where is the value now? Wherein lies “Integrity” or“Financial Republic”? The “Fast-Track”did not end well. The “Express” crushed to a halt. The “Multi-Money”became a mirage. Some customers walked “Giant Steps”to their doom. “Easy Fast”did not happen because after all, nothing that is easy comes fast. “Easy Fast”carried a hidden warning: cheap things are dear! Probably some of the companies started well but apparently, did not end well.
A display of pretentiousness was also evident through the use of the word “Global” in the names of five of the collapsed companies. They are: “Global Feed”, “Global Trust”,“Global One”, “Lead Global”, and “AC Global”! It was as if by laying some awkward claim to something beyond Ghana and stretch all the way into the global international arena would make the companies important and guarantee their success. The company founders might have used the word global as a marketing ploy, by telling unsuspecting clients, “See, we’re better than the other microfinance companies ooh! We are global! So come and do business with us!
Key lesson is: Buyer beware!
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