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The Bank of Ghana has revoked the licenses of 192 insolvent microfinance and microcredit companies.
The Central Bank also canceled the licenses of 155 other insolvent microfinance companies that ceased operations.
In a press release on Friday, the BoG explained that measures had been taken under section 123 (1) of the Banks and Specialized Deposit Institutions Act, 2016 (Law 930).
This action requires the Central Bank to revoke the license of a bank or specialized deposit institution (SDI) when the Bank of Ghana determines that the institution is insolvent or likely to become insolvent in the next 60 days.
As a result, the Bank of Ghana has appointed Eric Nipah as receiver of the specified institutions in accordance with Article 123 (2) of Law 930.
"The purpose of revoking the licenses of these institutions is to remove insolvent and dormant institutions that have no reasonable prospect of rehabilitation and that have denied depositors access to their deposits, thus posing a threat to the stability of the financial system.
"With the revocation of these licenses, the Bank of Ghana seeks to protect the stability of the financial system and protect the depositors concerned," said the Central Bank.
He added that, in order to recover depositors' funds, the government had released funds to allow the receiver to pay depositors after validation of their claims.
"In accordance with the creditors' hierarchy of claims set out in Law 930, other creditors of defaulting institutions will be settled by the receiver upon validation of their claims and to the extent that the receiver is able to derive a value from the remaining badets of the receivers. these creditors. institutions, "he said.
Click here for the list.
Meanwhile, the BoG on Friday withdrew the licenses of 29 insolvent microcredit companies.
The Bank of Ghana has also revoked the licenses of 10 insolvent microcredit companies that ceased operations.
According to the BoG, its action falls within the scope of Article 7 of the 2008 Law on Non Banking Financial Institutions (Law No. 774), which obliges it to revoke the law. the approval of an approved non-bank financial institution.
Under this law, if this institution ceases to carry out its activities, ceases to fulfill the requirements of the law or contravenes a provision of the law or rules or guidelines issued by the Bank of Ghana.
The Bank of Ghana also informed the Registrar of Companies in the Registrar General's Department of the revocation of these licenses and requested the Registrar General to initiate liquidation proceedings against these companies.
In total, 70 micro-credit companies were authorized by the Bank of Ghana from 2011 to the end of 2015 under Law 774 to provide microloans.
Severe underfunding, poor lending and risk management practices, and poor corporate governance practices were among the many reasons for the poor performance and eventual collapse of the 39 failed institutions whose the licenses have been revoked.
Despite the advice given to the institutions concerned by the Bank of Ghana over the last few years to remedy the identified regulatory violations and other supervisory problems, these institutions have not been able to solve the problems. brought to their attention.
Following the revocation of the licenses of these institutions, 31 microcredit companies will continue to operate. In the future, the Bank of Ghana strengthens its regulatory and supervisory framework and builds confidence in the microcredit sector through:
– a comprehensive review of licensing and supervisory policies and guidelines;
– a review of minimum capital requirements for microcredit and encouraging consolidation through voluntary mergers and acquisitions;
– introduction of proportionate, adequate corporate governance and risk management guidelines;
– strict supervision of approved microcredit companies and application of relevant regulatory requirements; and
– Increase the resources available for effective supervision of licensed microcredit companies.
The Central Bank badures the public of its commitment to promote the stability of the financial system.
Below is the list of companies involved
Allied Wealth Lending Limited Limited
Bennet Money Lending Limited
Bremco Money Loan Company Limited
Calmad Money Lending Company Limited
Catamount Finance Money Lending Limited
Citizens Money Lending Limited
Divine announcement loan of money
Fountain Money Lending Services Limited
GDFS Money Lending Limited
GFI Money Lending Limited
Great Africa Money Lending Limited
Hatmag Money Lending Limited
Haubins Money Lending Limited
Money Lending Limited Index
KAF Investment Money Lending Limited
KBN Money Lending Limited
KYC Money Lending Limited
McOttley Money Lending Limited
N & J Money Lending Limited
Obrapa Money Lending Limited
One2One Money Lending Services
Limited Orbite Money Lending Co. Limited
Pitsea Ways Money Lenders Limited
P-Mag Investment Money Loan Services Limited
Sat Finance Money Lending Limited
Shammah Capital Money Lending Limited
SNJ Money Lending Limited
Uni-focus Money Lending Limited
Zeta Money Lending Limited
MICROCREDIT COMPANIES – INSOLVENT AND CESSED OPERATIONS
Boafo Yena Money Lending Limited
CFI Money Lending Limited
CIF credit
First Money Lending Services Limited
Global Point Investment and Money Lending Services Limited
Smart money loan company limited
Kan Money Lending Company Limited
PD PAG Money Lending Limited
R.P.I.C. Limited money lending services
TCP Money Lending Limited
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