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Customers Receive Locked Up Funds Monday

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Dr. Ernest Addison

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.

BY Samuel Boadi

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