LemFi, formerly known as Lemonade Finance, a financial institution that has been providing international payment services across more than 12 countries in Africa has suspended all its services in Ghana.
The Lemfi Suspension
On November 16, 2023, the Bank of Ghana (BoG) issued a warning to the public to stop dealing with eight money transfer organizations (MTOs), including LemFi. According to BoG Secretary Sandra Thompson, these organizations were operating within the Remittance and the Ghana Forex Market without approval from the central bank.
The implications of this suspension are significant. LemFi, along with the other seven MTOs, were operating without the requisite authorization, which is a violation of Section 3.1 of the Foreign Exchange Act, 2006 (Act 723). This act states that a person shall not engage in the business of dealing in foreign exchange without a license issued under this Act.
Furthermore, Section 15.3 of the Act states that each transfer of foreign exchange to or from Ghana shall be made through a person licensed to carry out the business of money transfers or any other authorized dealer. The BoG has cautioned the Public, Banks, Dedicated Electronic Money Issuers (DEMI), and Enhanced Payment Service Providers (EPSP) against doing business with these unauthorized firms.
Failure to heed these directives could result in severe sanctions, including the withdrawal of the license of the institution in breach. Licensed MTOs were also reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines.
IMPORTANT UPDATE: Our services to Ghana 🇬🇭 pic.twitter.com/GbTzaawJVy
— LemFi (@UseLemfi) November 28, 2023
The suspension of LemFi’s services in Ghana is a significant development in the country’s financial sector. It serves as a reminder of the importance of regulatory compliance in the financial industry. As the situation unfolds, it will be interesting to see how LemFi and the other affected MTOs respond to these directives.