Section 58 of Act 930 ensures fit-and-proper criteria for leadership in MFIs to safeguard stability, as emphasized in BoG’s Corporate Governance Directive (2018). From my experience in governance audits, disqualifications prevent risks seen in the 2017-2019 cleanup (e.g., insider lending at Capital Bank). Below, I discuss four justifications.

1. Criminal Convictions or Fraud Involvement (5 Marks): Persons convicted of fraud, dishonesty, or financial crimes are disqualified to protect depositors. Justification: This mitigates reputational and operational risks; e.g., BoG revoked licenses of MFIs with fraudulent directors, preventing collapses and aligning with Basel principles for ethical leadership.
2. Insolvency or Bankruptcy History (5 Marks): Individuals declared bankrupt or involved in insolvent entities can’t serve, ensuring financial prudence. Justification: Prevents recurrence of poor decisions, as in UT Bank’s failure due to indebted leaders; BoG enforces this to maintain capital adequacy and public trust in MFIs serving vulnerable clients.
3. Conflict of Interest or Related Party Issues (5 Marks): Those with undisclosed conflicts, like ties to competitors, are barred. Justification: Promotes transparency, reducing self-dealing risks; practical example: Post-cleanup, BoG disqualified directors in MFIs with family loans, enhancing governance and compliance with Act 930’s anti-money laundering provisions.
4. Lack of Competence or Experience (5 Marks): Persons without requisite qualifications or experience in finance are disqualified. Justification: Ensures effective risk management; e.g., during DDEP, competent boards in MFIs like Sinapi Aba navigated liquidity, while unqualified ones faltered, supporting BoG’s aim for professional standards in microfinance sustainability.