The effects of Ponzi schemes and revocation of licences of some financial institutions on financial threat in Ghana
| DOI | https://doi.org/10.1108/JFC-01-2020-0003 |
| Published date | 13 March 2020 |
| Date | 13 March 2020 |
| Pages | 583-593 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
| Author | Edmond Ofori |
The effects of Ponzi schemes and
revocation of licences of some
financial institutions on financial
threat in Ghana
Edmond Ofori
Department of Accounting, West End University College, Accra, Ghana
Abstract
Purpose –The purpose of this study was to assess the effects of the Ponzi schemes and revocation of
licencesof some financialinstitutions in Ghana on financial threat.
Design/methodology/approach –The study adopted a quantitative research approach. Convenient
sampling method was usedto select 435 individuals from three regions in Ghana.Standardize questionnaire
developed by the researcher wasused as the main data collection instrument. The binary logistic regression
was used to test the relationshipbetween the dependent variable and the independent variables.
Findings –The results of the study showed a positive relationship between financialthreat and job loss,
general health, information search and loss of investment. However, negative relationship was identified
between financial threat and total debt, stress, economic hardship and anxiety. Findings from this study
imply that job loss, general health, information search and loss of investment are major factors that
determinedfinancial threat in Ghana.
Practical implications –This indicates that individualsin Ghana have become uncertain regarding the
use of current and future financial services in Ghana because most individuals have lost their jobs in the
financial institutions,cannot get access to safe drinking waterand education, need to gather more information
before investingin financial institutions in Ghana and losing of funds invested.
Originality/value –This study is the first to test the effects of the Ponzi schemes and the revocationof
licencesof some financialinstitutions in Ghana on financial threat using binary logisticregression.
Keywords Binary logistic regression, Financial institutions, Financial threat, Ponzi schemes,
Ghana
Paper type Research paper
Introduction
Ghana’sfinancial sectorhas experienced a lot of Ponzi schemes and revocation of licences of
insolvent savings and loans companies, finance house companies, microfinance and
banking institutions between 2015 and 2019 (Bank of Ghana, 2019b). In 2015, DKM
Diamond Microfinance Company Limited, Little Drops Financial Services,God is Love Fun
Club, Jaster Motors and Investment Limited and Care for Humanity Fun Club, which were
located in most parts of Bono Region, Bono East Region, Upper West Region and Upper
East Region of Ghana were involved in Ponzi schemes (GBN, 2016). Ponzi schemes are
© Edmond Ofori. Published by Emerald Publishing Limited. This article is published under the
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Financial
threat in
Ghana
583
Journalof Financial Crime
Vol.30 No. 2, 2023
pp. 583-593
EmeraldPublishing Limited
1359-0790
DOI 10.1108/JFC-01-2020-0003
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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