The Bank of Ghana has revoked the licenses of some 347 microfinance companies which are deemed insolvent, across the country.
These actions according to a press release issued by the BoG a while ago were taken pursuant to section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a bank or Specialised Deposit-taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent or is likely to become insolvent within the next 60 days.
‘’The revocation of the licences of these institutions is to get rid of insolvent and dormant institutions that have no reasonable prospects of rehabilitation and have denied depositors access to their deposits, thereby constituting a threat to the stability of the financial system. By the revocation of these licences, the Bank of Ghana seeks to protect the stability of the financial system and to protect affected depositors’’ the release explained.
It added further that ‘’ To salvage depositors’ funds, the Government of Ghana has made funds available to enable the Receiver pay depositors, after their claims are validated. In line with the hierarchy of creditor claims set out under Act 930, other creditors of the failed institutions will be settled by the Receiver upon validation of their claims and to the extent that the Receiver is able to realise value from the remaining assets of these institutions’’.
See the release and full list of affected companies below: