Collapsed microfinance firms: Receiver caps claim payments at ¢10,000 per depositor
Receiver for the 347 microfinance companies whose licenses were revoked by the Bank of Ghana in May 2019, Eric Nana Nipah has put a GH¢10,000 cap on claim payments.
He said the decision to place a cap on the amount to be paid customers was based on findings from a preliminary assessment of the situation of the collapsed finance institutions.
Speaking on the Citi Breakfast Show on Monday, Mr. Nipah said, “Yes, there is an initial cap of GH¢10,000.”
He said his team had noticed several cases of underreporting in the books of the microfinance companies which called for a thorough audit that could take several months, however, the team decided to balance the audit process and to speed up the payments.
“When I took over and I started work, one of the key things I did was to conduct a situational assessment to ascertain the state of affairs of these companies as at the 31st of May and the finding so far is revealing. We have noted a considerable amount of under-reporting and therefore the integrity of the financial statement raises quite a number of issues,” he said.
He added that, “a lot of the deposits were under-reported… So based on a preliminary assessment of what we were seeing on the ground, we have decided that, in ensuring a balance between timeliness and effective payment and ensuring scrutiny and accuracy of validation, we decided that we will initially put in a cap of GH¢10,000.”
Rather than wait to thoroughly undertake forensic examination which will take several months to complete before we have a complete picture, we would prudently and speed being of essence start by putting a cap of GH¢10,000 and making payment of claims of up to GH¢10,000. That way we have been able to douse to some extent all the pressures of people queuing, and people agitating,” Mr. Nipah further stated.
The BoG revoked the licenses of the companies earlier this year in line with section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
This mandates the central bank to revoke the licence of a bank or Specialised Deposit-taking Institution (SDI) “where the Bank of Ghana determines that the institution is insolvent or is likely to become insolvent within the next 60 days.”
Some customers of the affected microfinance companies last week claimed that they were not receiving their payments of more than GH¢10,000 despite making claims of over GH¢ 10,000 owed them by their respective institution.
But Mr. Nipah’s explanation on the Citi Breakfast Show gives indication that GH¢10,000 cap will be in force until the forensic audit is substantially completed.