BoG asks for GHS700m to clean microfinance sector

The Bank of Ghana has served notice that it will commence the clean-up of the microfinance sector in the country in the second quarter of 2019. The central bank has, therefore, requested an amount of GHS700 million from the Ministry of Finance to embark on the exercise...


The Bank of Ghana has served notice that it will commence the clean-up of the microfinance sector in the country in the second quarter of 2019.

The central bank has, therefore, requested an amount of GHS700 million from the Ministry of Finance to embark on the exercise.

At a press conference in Accra, the Governor of the BoG, Dr Ernest Addison, said the cost of the clean-up was estimated at GHS700 million, which the government was ready to make available from the second quarter of this year.

Dr Addison said: “We have done an initial assessment and the estimates we have done are not expected to be significantly higher than the GHS700 million.”

About 705,396 depositors of distressed or collapsed microfinance companies and rural and community banks (RCBs) risk losing a total of GHS740.5 million if the financial resources of those institutions are not shored up swiftly.

The GHS740.5 million represents deposits currently locked up in the 272 rural and community banks and microfinance companies which were either in distress or had folded up as of last year.

The BoG recently concluded its recapitalisation of the banking sector.

Since August 2017, nine local banks have gone under. While some of them were accused of using suspicious means and capital to set up, others were also found to have been mismanaged by their shareholders.

Apart from the two recent ones, Heritage Bank and Premium Bank, the others are former Finance Minister Dr Kwabena Duffour’s uniBank, The Beige Bank, Sovereign Bank, The Construction Bank, The Royal Bank, Mr Prince Kofi Amoabeng’s UT Bank, and Capital Bank, which was chaired by Pastor Mensa Otabil.

While UT Bank and Capital Bank were swallowed by the state-owned GCB Bank with the blessing of the Dr Ernest Addison-led central bank, the seven others were subsumed by an all-new state-owned bank, Consolidated Bank Ghana Limited (CBG), which was created by the Bank of Ghana during its “clean-up” exercise of the sector.


Source: Ghana/ClassFMonline.com/91.3FM



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