Explainer: Depositors of insolvent and dormant microfinance companies to receive monies from today

Explainer: Depositors of insolvent and dormant microfinance companies to receive monies from today

- The depositors of the 347 collapsed microfinance companies, will start receiving their claims from today, June 7, 2019

- Payments to depositors will be made at designated branches of CBG, following notifications to these depositors from the office of the Receiver

On the Friday, 31 May, 2019, the Bank of Ghana announced it has revoked the licenses of 347 insolvent and dormant microfinance companies in the country.

What this means is that funds of depositors will be locked up for a while.

The central bank upon the announcement, also named Eric Nana Nipah as Receiver for the insolvent and dormant microfinance companies.

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His main duties includes;

(i) to recover and maximise asset realisations for the benefit of creditors including mainly Depositors and

(ii) distribute realisations in accordance with the relevant provisions of Act 930, to satisfy the indebtedness of these institutions to their body of creditors, to the extent possible.

Also the government of Ghana has released funds to the Receiver for the payment of depositors of the 347 collapsed institutions starting Friday, June 7, 2019

According to a statement released by the Receiver, payments to depositors will be made at designated branches of the Consolidated Bank Ghana (CBG).

The statement states that depositors of the collapsed microfinance companies will receive notifications after their claims are validated by the Receiver, Eric Nipah.

Depositors whose claims have been validated and agreed will receive phone calls from the Receiver’s representatives confirming the amounts due to them, and directing them to the designated CBG branches for the processing and payment of their claims to the extent possible.

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Depositors will be required to provide valid ID documentation. These can either be passports, NHIS cards, Voters ID and Drivers Licenses.

In accordance with the order of ranking provided in the relevant sections of the Banks and Specialised Deposit-Taking Institutions Act, 2016, Act 930, all other creditors will be paid their claims depending on the quantum and timing of asset realisations in the receivership of the affected microfinance companies.

Meanwhile, Nipah has called on all depositors of the microfinance companies to exercise patience as the government has made available funds to pay each and every depositor whose claim(s) have been validated.

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Source: Yen

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