Customers Receive Locked Up Funds Monday

President Akufo Addo says the payment of locked up funds for customers of defunct microfinance as well as savings and loan companies will begin on Monday.The President, who was delivering the 2020

State of the Nation Address (SONA) yesterday in Parliament, indicated that about five billion cedis had been released to the receiver of the defunct institutions to make this possible.

According to the President, “I am informed that the receiver of the savings and loans and the microfinance institutions would on Monday, February 24, 2020, begin making payments to their customers, with these monies totaling five billion cedis being in addition to the GH¢13 billion being paid to the customers of the failed banks. 

He reiterated that “all depositors of the savings and loans and microfinance institutions including DKM which collapsed in 2015, will receive 100% of their deposits once the validation exercise is concluded.”

The Bank of Ghana (BoG) revoked the licences of 347 insolvent microfinance companies (including 155 companies that had already ceased operations) and 23 savings and loans companies as well as finance house companies, all of which were assessed as insolvent.

A receiver was appointed for these companies and the refund of depositors’ funds had been progressing steadily, with funds provided by the government.

BoG also revoked the licences of a number of other failed institutions, namely, 29 microcredit companies (including 10 of such companies that had already ceased operations), a leasing company and a remittance company, while referring them to the registrar general for liquidation under the NBFI Act and other relevant legislation.

Total loans taken over by the receivers amounted to GH¢16.56 billion, while total proceeds realized up to date were above GH¢1.2 billion.Before this announcement by President Akufo-Addo, more than 100 vehicles of the defunct savings and loans as well as microfinance companies are said to have been displayed for auction in Accra since a fortnight, all meant to mobilise some funds and pay depositors.

SEC Validates Customers’ Claims

In a different development, the Securities and Exchange Commission (SEC) has indicated it was yet to commence two phases of the payment of claims to investors of some 53 fund management companies whose licences were revoked in the recent financial sector clean-up exercise.

A notice to the public by SEC recently, which made this known, averred, “SEC hereby issues this notice pursuant to sections 3 and 209 of the Securities Industry Act, 2016 (Act 929) to all investors (excluding Investors of Collective Investment Schemes) on claims for the 53 Fund Management Companies (FMCs) with revoked licences.”

“SEC would like to thank investors and all stakeholders for the successful completion of the submissions which commenced on November 18, 2019 and ended on January 15, 2020. Investors who are yet to receive acknowledgment of claims from the SEC should note that acknowledgments are ongoing.

“Two phases of the payment of claims are yet to commence. In the first phase, the amount promised and allocated by government would be paid to investors after the validation of claims submitted,” it added.

It mentioned that the second phase would be after a Court-appointed Official Liquidator realized net proceeds upon successfully winding-up proceedings in court in relation to the affected fund managers’ assets.It added that further communication on when payments would commence would be made in due course.