Blog – Page 9 – receivership

NOTICE TO ALL BORROWERS AND LOAN DEFAULTERS

BOG | Matilda Akakpo | March 16, 2020 | Comment off

The receiver for 347 collapsed Microfinance companies and 23 Savings and Loans and Finance House Companies in a statement issued to the general public, person/persons/institutions who took loan facilities from these defunct companies are to visit any of the maintained branches of these institutions for repayment of the loans immediately. “Notice to all Borrowers and Loan Defaulters,” the statement added 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 THE 23 SAVINGS & LOANS AND FINANCE HOUSE COMPANIES NOTICE TO ALL BORROWERS AND LOAN DEFAULTERS 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 insolvent 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. Section 127 (3) of the Act mandates the Receiver to realise all assets of the resolved companies, including outstanding loans and advances, for the benefit of creditors. Accordingly, the Receiver wishes to notify the general public especially person/persons/institutions who took loan facilities from these defunct companies to visit any of the maintained branches of these institutions for repayment of the loans immediately. (for a list of the maintained branches, please visit the Receiver’s website: www.ghreceiverships.com). Customers may settle their outstanding obligations to the defunct companies through the respective MTN MoMo numbers and/or receivership bank accounts listed on the below tables. The Receiver would like to entreat all borrowers to cooperate with his authorised representatives/agents in this regard. Borrowers are to note that, the Receiver will pursue all recalcitrant defaulters through all available means as permitted by the Act including, but not limited to, legal actions and publishing names of recalcitrant defaulters in national and international newspapers. Please note that the working hours for the maintained branches of the defunct companies remain from 8:00am to 5:00pm, Mondays to Fridays. For further information on the Loan Repayments, please call 024 243 9441/ 0550000966. You may also write to the; The Receiver, 25 B Manet Towers, PMB CT42, Cantonments, Accra, Ghana www.ghreceiverships.com SGD ERIC NANA NIPAH

UPDATE ON FULL PAYMENTS TO DEPOSITORS WHOSE CLAIMS HAVE BEEN VALIDATED IN THE RESOLUTION PROCESS

BOG | Matilda Akakpo | March 2, 2020 | Comment off

https://www.youtube.com/watch?v=TcABs3h22PM&feature=emb_logo A Press Statement issued by the Receiver for the 347 collapsed Microfinance companies and 23 Savings and Loans and Finance House Companies indicated the status of full payments to depositors. “Update on full payments to depositors whose claims have been validated in the resolution process” the statement added 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 THE 23 SAVINGS & LOANS AND FINANCE HOUSE COMPANIES UPDATE ON FULL PAYMENTS TO DEPOSITORS WHOSE CLAIMS HAVE BEEN VALIDATED IN THE RESOLUTION PROCESS In accordance with Section 123 of the Banks and Specialised deposit-taking institutions Act, 2016 (“Act 930”), Bank of Ghana (BoG) appointed Eric Nana Nipah, a Director of PricewaterhouseCoopers (Ghana) Limited (PwC) as Receiver for the purposes of winding down the affairs of 347 Micro Finance Companies (“MFCs”) as well as 23 Savings and Loans and Finance House Companies (“S&Ls”) whose licenses were revoked on 31 May 2019 and 16 August 2019 respectively. As indicated in the Press Release of Monday 24 February 2020, the primary duties of the Receiver include: recovering and maximising asset realisations for the benefit of Creditors including mainly Depositors; and realising assets and distributing them in accordance with Section 135 of Act 930, to satisfy the indebtedness of these institutions to their body of Creditors including depositors, to the extent possible. Status of Depositor payments prior to 24 February 2020 Based on Section 135 of Act 930, the priority of ranking regarding Creditor payments in the above receiverships place depositor payments down the ranking ladder and at the level of Unsecured Creditor payments. Given challenges experienced in the realisation of assets of these resolved companies, and considering the order of Creditor payments per Act 930 enumerated above, full or partial settlement of depositor claims from asset realisations of these companies is likely to be minimal; in some cases, depositors of some of these companies are not likely to receive any payments in the resolution process. In line with Government’s commitment to protect depositors funds however, and to shore up public confidence in the financial system, at the commencement of the resolution process, Government provided the Receiver with funds to cushion the immense financial burden that the very vulnerable depositors were likely to face in the receiverships of these resolved MFCs and S&Ls. Prior to 24 February 2020, out of over 360,000 depositor claims in number worth approximately GHS6.4bn received in the MFCs and S&Ls receiverships, as well as in the 39 Micro Credit Companies (“MCCs”) placed in Official liquidation, more than 320,000 in number of validated claims were fully settled in cash. To fully settle the remaining approximately 40,000 depositor claims in these receiverships as well as in the official liquidation of the 39 MCCs, Government has provided additional funding by way of a combination of cash and bonds totalling approximately GHS5bn to the Receiver and Official Liquidator, to ensure that all outstanding depositor claims duly submitted and validated in the resolution process are totally satisfied. Depositor payments from 24 February 2020 to 31 March 2020 The payment of the remaining approximately 40,000 depositor claims begun in earnest on Monday 24 February 2020 funded by the cash component of the GHS5bn amounting to GHS1bn. As at Friday 28 February 2020, depositor claims of approximately 15,000 in number, worth over GHS745million have been transferred to Consolidated Bank Ltd (“CBG”) the paying bank, for payment to depositors, from the GHS1bn cash component of funds received from Government. We are in the process of reconciling with CBG, the number and value of depositor claims which have actually been paid to date. Payment of outstanding depositor claims which have been validated and agreed in the receiverships and official liquidation of the resolved institutions will continue this week and beyond and would be concluded by 31 March 2020. It is expected that overall, approximately 352,0000 depositor claims will be fully settled with cash only by the conclusion of depositor payments and that the remaining 8,000 depositor claims (worst case scenario), worth approximately GHS4bn will be fully settled within this period i.e. by 31 March 2020 with a combination of cash and Bonds. Full details of the bonds to be issued to depositors whose claims will not be fully satisfied by the payment of cash alone will be disclosed in the course of this week. Stakeholders may direct all concerns on the above receiverships to: The Receiver, 25 B Manet Towers PMB CT42, Cantonments Accra, Ghana Tel: +233 (0) 242 439 441/+233(0) 20 4904250/ 0550000966 www.ghreceiverships.com SGD ERIC NANA NIPAH

Collapsed Banks: 8,884 customers have been paid – CBG

BOG‚ Saving and Loans | 2019@@2019 | February 28, 2020 | Comment off

As at close of today, February 27, 2020, a total of 8,884 customers of the collapsed savings and loans (MS&Ls), Micro Finance Institutions (MFIs) and Micro-credit Institutions have been paid their monies, Consolidated Bank of Ghana has announced. For Savings and Loans, 449 social organisations, 418 companies and 152 rural banks and finance houses have been paid. 132 social organisations, 22 rural banks and finance houses, 48 financial security entities and 44 companies have so far received their locked-up funds with regard to MFIs. Under Micro-Credit Institutions, 28 companies and institutions have so far been paid their monies. The Bank of Ghana appointed Director of Price Waterhouse Coopers Limited, Eric Nana Nipah, as the Receiver in accordance with Section 123 of ACT 930 of Bank of Ghana (BoG). Eric Nana Nipah, however, noted that a combination of cash and bond will be used to settle depositors. Meanwhile, he averred he is hopeful that with the above funding arrangement, about 97.6% of individual claimants will receive their entire deposits in cash. https://www.youtube.com/watch?v=lrNsNRK7qW8

Receiver Confirms: Full Payments Of Dissolved Banks & Microfinance Ongoing

BOG‚ Saving and Loans | 2019@@2019 | February 27, 2020 | Comment off

Full Settlement Of Depositors Gradually Progressing–Receiver Reveals

BOG‚ Saving and Loans | 2019@@2019 | February 27, 2020 | Comment off

The Receiver for 347 Micro Finance companies as well as 23 Savings and Loans and Finance House companies whose licenses were revoked on 31 May 2019 and 16 August 2019 respectively, has issued a notice to depositors and the general public on full payments of locked-up funds. Speaking in an interview on 26th February 2020, The Receiver indicated that full and final payments are ongoing. He explained that the Government has made available to the Receiver a combination of cash and bonds totaling approximately GHS5bn to fully settle outstanding depositor claims of these institutions as well as of the 39 Micro Credit institutions in official liquidation. The Receiver stated that once ongoing payments are completed, over 352,000 claims will have been fully paid, leaving a difference about 8,000 claims, to clear by way of bonds only. As part of payment modalities, CBG will open new accounts for all depositors whose claims have been validated and agreed in the receiverships of the above companies. Following this, SMS messages will be sent out from the Receiver to depositors due for payment, setting out the account number and cash amount due to the depositor, which they can then withdraw. Depositors are informed that the Receiver will fully settle outstanding depositor claims once these claims have been validated and agreed upon. Stakeholders may direct all concerns on the above receiverships to www.ghreceiverships.com

6,446 CUSTOMERS OF S&LS, MFIS, MCIS LOCKED-UP DEPOSITS PAID

BOG | Matilda Akakpo | February 27, 2020 | Comment off

Some 6,446 individual customers of the collapsed savings and loans, micro finance and micro credit institutions have been paid, three days after the Receiver began paying depositors their locked-up funds. For S&Ls, 449 social organizations, 418 companies and 152 rural banks and finance houses have been paid. 132 social organizations, 22 rural banks and finance houses, 48 financial security entities and 44 companies have so far received their locked-up funds with regard to MFIs. For MCIs, 28 companies and institutions have so far been paid. A combination of cash and bonds will be used to settle depositor claims. According to the Receiver, 97.6% of individual claimants will be fully settled in cash. But other categories of depositors including corporates will be fully settled through a combination of cash and bonds. In the first day of payment, about GHS200 million was disbursed to 800 customers by the Receiver through Consolidated Bank Ghana. The government, through the Ministry of Finance, on Monday, released GHS5 billion to the Receiver of the defunct Savings and Loans and Microfinance Companies, as well as the Official Liquidator of the Microcredit companies through Consolidated Bank Ghana (CBG). This was in a combination of cash and bonds to fully settle all validated claims due depositors of failed Specialised Deposit-Taking Institutions (SDIs). This intervention, the ministry said, will provide liquidity and guarantee the funds of individuals, businesses, and financial institutions that have been locked up in these defunct financial institutions, pending the completion of the Receivership exercise, adding, with this intervention, all depositors will now be paid in full.

THE REFUND OF DEPOSITORS’ MONIES

BOG | Matilda Akakpo | February 26, 2020 | Comment off

Government has announced that it has allocated GHc5 billion for the complete refund of all deposits placed by the banking public with the savings and loans companies and the microfinance institutions that were liquidated in mass by the Bank of Ghana last year. This confirms the promise made by vice president Dr Mahmud Bawumia recently in Kumasi at his latest town hall meeting with the general public. The announcement marks a departure from government’s earlier policy stance, dictated by fiscal constraints last year, which forced it to place a GHc20,000 cap on refunds to depositors. The decision to make full refunds brings its stance in line with that applied to deposits in commercial banks that were liquidated between 2017 and 2019. Initially, government had obviously hoped that recoveries by the receivers it had contracted to wind up the affairs of the liquidated financial intermediaries would make up the gap between its cap on refunds and what was actually due to depositors. However, it has since become clear that just as with the liquidated commercial banks, most of the lost monies will not be recovered; so far only about GHc1 billion out of GHc10 billion anticipated has actually been recovered. Thus, government was caught between leaving depositors to lose much of their monies, along with their confidence in financial intermediation, or refunding those monies and taking a severe hit on its already precarious fiscal position. The debate as the preferred option will continue to rage. This newspaper simply holds the view that it was government’s call to make, which it has gone ahead to do. Support for, or opposition to that decision by the public will form part of the considerations that will go into the voting decisions made during the next general elections scheduled for late this year. However, we find it imperative to point out that government’s refunds only apply to financial intermediation institutions that were duly licensed by their regulators. Thus, for example, it will not apply to customers of MenzGold, who chose to believe the celebrities who supported that institution rather than the regulatory authorities who warned that it was not duly licensed to engage in the activities it was carrying out. This should serve as a crucial lesson for the banking public going forward. Regulators have the final say and have the best information as to the activities of the institutions under their purview. Just as importantly, the banking public should realize that those regulators will not be in a hurry to warn them off during the early stages of a deposit taking institution’s financial troubles because doing so would all too easily cause a run on deposits and thus forestall any possibility of restoring its financial stability and solidity. Therefore, the banking public needs to learn how to judge the safety of each deposit taking institution as a haven for their savings and investments by themselves, using basic informative ratios such as capital adequacy and liquidity. These ratios are quite easy to understand and deposit taking institutions are required by law to display them in their respective banking halls. The banking public needs to be warned that the refunds now being financed by an already cash-strapped government will not happen again. Deposit insurance has now commenced but coverage is severely limited to retail sized deposits; a depositor who leaves large deposits in an institution that goes under stands to lose most of the money deposited. Ignorance is no excuse under the law; going forwards financial ignorance will be no excuse either.

RECEIVER TO PAY ALL CUSTOMERS OF DEFUNCT MICROFINANCE, S&LS FIRMS BY MARCH ENDING

BOG | Matilda Akakpo | February 26, 2020 | Comment off

The receiver of the collapsed microfinance companies, savings and loans, and finance houses, has assured that all affected depositors will receive their locked up investments by end of March this year, after payment processes started on Monday, February 24, 2020. The deadline follows a promise by President Akufo-Addo during the State of the Nation Address delivered last week, where he revealed that an amount of GH¢5 billion has been earmarked to reimburse all customers of the defunct companies from Monday, February 24, 2020. In an interview with Citi BusinessNews, spokesperson for the Receiver, Philomena Kuzoe, said since February 24, about 800 people have been notified to retrieve their locked-up cash amounting to GH¢200 million from Consolidated Bank Ghana (CBG). “So yesterday [Monday], we paid the social institutions made up of the churches, hospitals, schools, welfare associations who have their claims with these defunct microfinance and savings and loans institutions. We are expecting to finish by the end of March.” “By the time we finish with this exercise, which involves about 360,000 depositors, we will only be left with about 8,000 who we will be doing cash and bonds,” she added. Payments of locked deposits The customers of the 347 microfinance companies, 23 savings and loans and finance houses, as well as 39 micro-credit institutions with outstanding obligations, are expected to be paid in either cash or bonds. According to a release issued by the Consolidated Bank, Ghana, the bank has chosen to payout customers’ funds, and will open new accounts for affected customers whose claims have been validated and accepted for payment. It added that the GH¢5 billion the government has earmarked to settle all outstanding payments in full is a combination of cash and bonds. The bank adds that customers whose locked-up funds exceed the GHS20,000 cap will have another investment account created on their behalf where they will be paid using the bond which will mature later. The Bank adds that the affected customers are to wait for an SMS from the receiver confirming the acceptance of their claims before turning up at any CBG Branch for payments. The customers will be required to present any national identification card in order to access their funds. Corporate and SME customers of defunct financial institutions are also not left out in this bout of fresh payments. The bank says such customers will receive a default savings account that will be opened and communicated to them by the Receiver. “They will then go through the normal KYC to open their current accounts where funds in the savings account will be transferred into,” the statement said.

RECEIVER OF DEFUNCT FINANCIAL INSTITUTIONS CREDITS ACCOUNTS OF 800 DEPOSITORS WITH ¢200M

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

The Receiver of the defunct financial institutions has so far credited ¢200 million into accounts of 800 depositors of the Consolidated Bank Ghana (CBG). Payment of the depositors funds commenced on the night of Monday, 24 February 2020. This has resulted in corresponding SMS messages sent to some depositors. Some of these beneficiaries that have been communicated via text messages were mainly schools, hospitals and churches with locked-up funds. Consolidated Bank Ghana, going forward will continue to credit accounts of depositors whose claims have been validated. The receiver was expected to roll out the payment to these depositors Monday before the close of work. But it appears challenges with finalizing work on validated claims may have affected them in meeting that deadline. According to the receiver it has received 5 billion cedis in cash and bonds to facilitate this payment. According to the finance ministry is has spent GH¢17.7 billion on the financial sector clean-up. GH¢11.65 billion cedis was spent on the banking sector. GH¢6.1 billion on specialized-deposit-taking-institutions as well as microfinance institution. The finance ministry has noted that this would help improve liquidity in the system.

GOVERNMENT SPENDS GH¢17.7BN ON S&LS, MFIS

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

The government has so far spent about GH¢17.7 billion on the clean-up of the financial services sector. GH¢11.65 billion has been used to settle depositors in the banking sector and GH¢6.1 billion on the Savings and Loans Companies and Microfinance Institutions. According to a statement from the Finance Ministry, “We expect that the recent accelerated pace of the prosecutions and an intensification of the civil recovery process under the Receivership will result in substantial recovery of these monies for the Treasury.” The government, through the Ministry of Finance, on Monday, 24 February 2020, released GH¢5 billion to the Receiver of the defunct Savings and Loans and Microfinance Companies, as well as the Official Liquidator of the Microcredit companies through Consolidated Bank Ghana (CBG). This was in a combination of cash and bonds to fully settle all validated claims due depositors of failed Specialised Deposit-Taking Institutions (SDIs). This intervention, the ministry said, will provide liquidity and guarantee the funds of individuals, businesses, and financial institutions that have been locked up in these defunct financial institutions, pending the completion of the Receivership exercise, adding, with this intervention, all depositors will now be paid in full. It will be recalled that the Ministry initially provided funds for the Receiver to settle validated depositor claims of the defunct Savings and Loans as well as Finance Houses of up to GH¢20,000 per depositor, with the understanding that the remaining validated claims would be settled as and when value was realised from the sale of the assets of the defunct institutions. However, due to the slow process of recovery in the receivership process, the Ministry has now made available these additional resources to pay all remaining validated depositors’ funds. The statement added that all depositors affected should note that the Receiver and Consolidate Bank Ghana will provide them with a detailed plan and procedures to fully settle all outstanding depositor claims in cash and fixed instruments once the claims have been validated in line with the resolution process.