Month: August 2020

NOTICE TO THE GENERAL PUBLIC – MFCs AND S&Ls WITH NO RECORDS

BOG | Matilda Akakpo | August 31, 2020 | Comment off

IN THE MATTER OF THE BANKS AND SPECIALISED DEPOSIT-TAKING INSTITUTIONS ACT, 2016 (ACT 930) AND IN THE MATTER OF THE RECEIVERSHIPS OF THE 347 MICROFINANCE COMPANIES AND 23 SAVINGS & LOANS AND FINANCE HOUSE COMPANIES NOTICE TO THE GENERAL PUBLIC Pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) (“the Act”), Bank of Ghana (“BoG”) on 31 May 2019 and 16 August 2019 revoked the operating licenses of 347 Microfinance Companies and 23 Savings and Loans and Finance House Companies respectively, and in accordance with Section 123(2) of the Act appointed Eric Nana Nipah, a Director of PricewaterhouseCoopers Ghana Limited (“PwC”) as the Receiver for the purposes of winding down the affairs of these Companies. As you may be aware, the mandate of the Receiver under Section 127(3) of Act 930 is to maximise asset realisations for the benefit of Creditors including Depositors, as well as settle the obligations of the company to its body of creditors to the extent possible. In carrying out his duties and as part of his Day 1 activities, the Receiver took control over the premises of these resolved companies and in the process, secured the assets and liabilities of these companies, as well as their books and records to the extent possible. A summary of the operational status of the resolved companies as at the date of revocation is set out below: Details Number of Resolved Companies Number of Operational Companies Number of Non-operational Companies Resolved Microfinance Companies 347 192 155 Resolved Savings & Loans and Finance House Companies 23 21 2 Total 370 213 157 Based on the above table, out of a total of 370 entities in resolution, 157 were non-operational with some of these companies having ceased operations long before BoG revoked their licenses. In the conduct of the resolution of these companies, a major challenge the Receiver has faced with some of the non-operational companies has been in the area of securing the books and records of these companies both manual and electronic. At the commencement of the resolution process, there were 157 non-operational companies whose books and records we were not able to locate and secure. Based on the collaborative arrangement we have with the Economic and Organised Crime Office (“EOCO”) which includes assets tracing and investigations, over time, we have been able to retrieve books and records from 131 resolved entities which were not operational at the commencement of the resolution of these companies, thereby making it possible for us to be able to validate creditor claims on these institutions. Currently there are 35 resolved companies with depositor claims worth approximately GHS252m which have no books or records available to us, to enable us to validate and settle these claims under the Depositor Payment Scheme. We are working with EOCO to locate and retrieve these companies records in order to be able to validate and settle depositor claims made on these companies. Attached at Appendix 1 is a list of the 35 resolved companies the Receiver is yet to obtain books and records on, to enable the validation of creditor claims including depositor claims to be undertaken in the resolution exercise.  The Receiver, No 54 Olusegun Obasanjo Highway Opposite Accra Girls High School Accra, Ghana www.ghreceiverships.com SGD ERIC NANA NIPAH   Appendix a)      Microfinance and Microcredit Companies Without Records       No Name of Resolved Institution Date of Closure No. of Claims  Value of Claims(GHS’000) 1 ABIS PLUS MICROFINANCE LIMITED Sept, 2014 31 24 2 AFRICAN TRUST MICROFINANCE LIMITED Dec, 2015 122 481 3 AG MICROFINANCE LIMITED May, 2017 2 4 4 BEDEL May, 2019 2 988 5 BENGAY MICROFINANCE LIMITED Dec, 2017 3 59 6 BIG DREAMS MICROFINANCE LIMITED Sept, 2013 1 1 7 BOIN MICROFINANCE COMPANY LIMITED May, 2019 4164 2,974 8 COMMON CAPITAL MICROFINANCE LIMITED Mar, 2016 2 1,283 9 CROWN CAPITAL MICROFINANCE LIMITED May, 2019 2 29 10 D-VANC MICROFINANCE LIMITED May, 2019 1 1 11 DWETIRE MICROFINANCE LIMITED May, 2019 5 10 12 ELITE MICROFINANCE LIMITED Jun, 2017 2 858 13 ERA MICROFINANCE SERVICES LIMITED Oct, 2013 23 943 14 GMET MICROFINANCE LIMITED Dec, 2016 1 659 15 GODIGO MICROFINANCE LIMITED Sept, 2013 10 8 16 GOLDEN TRUST MICROFINANCE CO. LIMITED Jun, 2017 3 2,451 17 HALAL MICROFINANCE LIMITED 2013 1 1 18 HIGH PRESTIGE MICROFINANCE SERVICES LIMITED Aug, 2016 5 188 19 ICS MICROFINANCE LIMITED Mar, 2015 1 6 20 JADA MICROFINANCE LIMITED Apr, 2014 1 13 21 JOPAT MICROFINANCE COMPANY LIMITED Jul, 2012 1 17 22 JOY HELP MICROFINANCE LIMITED Sept, 2016 5 17 23 KAPITAL EXPRESS MICROFINANCE COMPANY LIMITED Dec, 2018 1 6 24 KINGDOM TRUST MICROFINANCE LIMITED Oct, 2014 13 68 25 LIBERTY DAILY May, 2019 1 5 26 MAN CAPITAL MICROFINANCE COMPANY Apr, 2017 388 67,235 27 NOBLE DREAM MICROFINANCE LIMITED Mar, 2014 9,427 122,171 28 RESTORE MICROFINANCE COMPANY LIMITED Jul, 2012 1 20 29 ROYAL FUTURE MICROFINANCE LIMITED Oct, 2012 3 30 30 SAVANNAH MICROFINANCE LIMITED May, 2019 1 22 31 STAR PLUS MICROFINANCE LIMITED Sept, 2014 208 202 32 STARLING MICROFINANCE SERVICES LIMITED May, 2019 14 88 33 UNIQUE-MAS MICROFINANCE COMPANY LIMITED May, 2019 2 549 34 *GREAT AFRICA MICRO CREDIT COMPANY Jan, 2017 1 116 Total   14,448 201,527 *Great Africa Microcredit is under Official Liquidation       a)    Savings & Loans and Finance House Companies Without Records No Name of Resolved Institution Date of Closure No. of Claims  Value of Claims(GHS’000) 1 CREST SAVINGS AND LOANS November 2015 28 47,980 2 STERLING SAVINGS AND LOANS January 2011 3 2,735 Total   31 50,715

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ALL CUSTOMERS OF COLLAPSED BANKS PAID – BOG

BOG | 2019@@2019 | August 26, 2020 | Comment off

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has said the Receiver of the collapsed banks has settled all payments due depositors. The governor said 95 per cent of the customers of savings and loans companies, microfinance institutions and finance houses had also been paid their deposits and investments. Dr. Addison, briefing the President, Nana Addo Dankwa Akufo-Addo, at the BoG yesterday on a number of issues in the financial sector, especially the banking crisis, said there was just about five per cent of depositors of the non-bank financial institutions which had large amounts of money to be settled that were swapped with bonds which were to be retired over five years. He also indicated that there were a few delays regarding depositors of the GN Bank/GN Savings and Loans and First Allied Savings and Loans which were cleared last three weeks. The governor added that the government had provided a bond worth GH¢1.7 billion, out of which GH¢700 million had been monetised, with which the Receiver was also working at clearing the last people that were left in this segment. President visits Dr. Addison gave the breakdown when President Akufo-Addo asked the governor to tell Ghanaians about the causes and effects of the banking sector clean-up and the state of payment to customers and depositors who had accounts with the banks. The President, who is the third President, after Dr. Kwame Nkrumah and J. J. Rawlings, to visit the BoG, paid a working visit to the central bank to commend the staff for their work and also salute them for the role they had played in managing the economy. He later visited the Ghana Stock Exchange (GSE), the first President to have done so, to interact with its management and staff. Measures Explaining to the President what the BoG had done to avert a repetition of the crisis, Dr. Addison referred to the passing of the new Corporate Governance Directive, which was at the heart of the crisis. He said because there was a lot of falsification of data submitted to the central bank by the financial institutions, the bank had brought in a new technology which would allow it to get the data directly from the sources to avoid human intervention in data retrieval. He said because many of the banks reported that they had capital when, in fact, they did not, the BoG had reviewed the entire capital verification process of banks, saying it was currently almost impossible to have a bank that did not have any capital to feign it. Dr. Addison said the staff of the Banking Supervision Department of the BoG had received a lot of training with the International Monetary Fund (IMF) and some other technical assistant providers. Results He said the clean-up had culminated in a stable financial sector with fewer banks and specialised deposit-taking institutions (SDIs) which were well capitalised, liquid, solvent and better able to support the nation’s economic growth agenda. Those were the efforts that helped the BoG to earn international recognition as the Central Bank of the Year in 2019, he added. Maximum support Responding to the governor, President Akufo-Addo said the government found it necessary to give the maximum support for the clean-up exercise because the fragility in the financial sector that his administration inherited was terrible. He said many of the people responsible for the crisis had found it convenient to point accusing fingers at those who were trying to clean up the mess. He said the matter had been handled very well, which had made the country come out of the financial sector crisis stronger. The President described the feat as a major achievement for the governor and his team, stating that it was one of the “reasons I wanted very much to come here”. Clear He said, however, that measures in place to forestall the recurrence of the banking crisis were not clear to many, saying too many people wanted to know, for instance, what particular specific measures had been taken within the BoG to prevent similar crises in the future. “I don’t think there is sufficient publicity. And I think with an occasion such as this, it is an opportunity to tell the Ghanaian people the measures that have been put in place to make sure that these events don’t recur, especially the banks’ own institutional mechanism to ensure that they don’t reoccur,” the President advised. AfCFTA He urged the BoG and the GSE to position themselves well to help the nation achieve its vision of becoming the financial hub of Africa. He said as the host of the African Continental Free Trade Area (AfCFTA) Secretariat, Ghana must provide the needed leadership for the rest of the economies on the continent to harness their collective efforts to ensure the success of free trade. President Akufo-Addo said the AfCFTA had great positive impacts and enormous possibilities for the future welfare of the African people, and that the host country for the secretariat would have to be seen to be offering the needed leadership on the continent. That, he explained, must come in the way in which the economies were properly managed and developed and the measures that would also allow the ideas of the free trade to succeed because the BoG would have to play a critical role in that compelling future. GSE To the stock exchange, which has listings from a couple of West African countries, President Akufo-Addo expressed the belief that Ghana would now serve as the headquarters of the AfCFTA and the centre of attraction for trade, in which the GSE would have a major facilitating and developmental role to play. “Your role in all of that is going to be critical. So the dimensions of the exchange and what is feasible on its part are growing larger and larger. It should have a Pan-African and continental camera to work and think,” he charged the two institutions. Strong “I think a strong and robust stock exchange is

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IT DIDN’T MAKE SENSE TO CONTINUE SUPPORTING THE COLLAPSED BANKS – BAWUMIA

BOG | Matilda Akakpo | August 25, 2020 | Comment off

Vice President Dr Mahamudu Bawumia says government had no option than to shut down some banks and financial institutions in the country. He said even though the situation is sad it didn’t make sense to continue supporting these banks that are suffering. “It was bad . . . when I saw the numbers at the time it was quite frightening,” he said. He said the banks were using the Central Bank’s liquidity support for other purposes. This follows claims that government could have used other means to save the banks and prevent the loss of jobs. The Vice President who was speaking in a one-on-one interview with Kwami Sefa Kayi on Peace FM’s morning show ‘kokrokoo’ said the then NDC administration was aware of the situation but did nothing about it and rather kept offering liquidity support. “The NDC was aware there was a problem . . . these were bad practices of government, but we had to step in,” he stated. “By the time we got into office things were unraveling; we were on the brink of the collapse of the system so the BoG had to rescue the situation. This is one of the most important acts that have been done to save the economy.”

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I’VE PAID ALL LOCKED-UP BANK DEPOSITS, 98% OF MFI, S&L DEPOSITS – AKUFO-ADDO

BOG | Matilda Akakpo | August 5, 2020 | Comment off

President Nana Addo Dankwa Akufo-Addo has said his government has paid all the locked-up deposits in the nine local banks that collapsed and 98 per cent of the funds that got stuck in the over 386 microfinance institutions, finance houses and savings & loans companies that also went down. The banks and financial institutions were collapsed by the Bank of Ghana within a space of two years in a clean-up exercise of the financial sector. In the mid-year budget review that was recently presented to Parliament, Finance Minister Ken Ofori-Atta said the government is spending GH¢21 billion in picking up the tabs for the clean-up exercise. Speaking on Koforidua-based GBC-owned Sunrise FM in the Eastern Region on Tuesday, 4 August 2020, President Nana Akufo-Addo said the state is not indebted to any Ghanaian or institution that fell victim to the collapse of the nine local banks. “All those who had deposits in the banks, all of them, their monies have been refunded”, the President said.“Let me repeat it: All those whose savings were in the banks, all those savings have been refunded and paid to the people”, he stressed. The President said but for the central bank’s intervention under his watch, the depositors would have lost all their funds since the affected banks were already on the brink of collapse. “In fact”, he noted, “the intervention of the central bank was all to protect their savings because many of the banks that finally went into receivership were about to collapse”, adding: ‘Their situation was dire, and if they had been allowed to collapse, all those deposits would have gone up in smoke”. He said: “As far as the microfinance and savings & loans institutions are concerned, 98 per cent of the deposits of the funds have also been paid”. The President conceded: “There is still a balance”, noting: “The Receivers, Nipah and the others, are working on it and I believe Nipah has gone so far as to say that by the end of August, all of them would have been paid”.“Yes, there are still some in the system that have not received their money but the effort is being made to make sure that they are paid”, he said.

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