A Financial Economist Dr, Lord Mensah has expressed doubt about the ability of the receiver of the now defunct 347 microfinance companies, to be able to pay all the affected depositors their full principals in addition to their interests.
In an interview with Citi FM, Dr. Lord Mensah said the higher than normal interest rates usually promised by Microfinance Companies will make it impossible for the Central Bank to honour its promise to depositors.
“The interest rates that some of the Microfinance companies were parading on their deposits were so huge that I don’t think Bank of Ghana would be ready to absorb them. So we should expect the BoG to reduce the interest rate for some depositors and that, of course, will have an impact on the confidence of these depositors as far as the financial system is concerned.”
Customers to be paid within 30 days
Customers of the collapsed microfinance companies who are entitled to claims are expected to be paid within 30 days.
The payments will, however, follow the completion of validation for such claims by the Receiver, Eric Nana Nipah of PricewaterhouseCoopers (PwC).
The Central Bank appointed Eric Nana Nipah, a Director of PricewaterhouseCoopers (Ghana) Limited (“PwC”) as receiver for all the 347 microfinance companies whose licenses were revoked last Friday following what it said was to protect the stability of the financial system and to protect affected depositors.
In a statement by the BoG, it said the receiver is to among others recover the benefits of creditors as well as satisfy the indebtedness of the affected institutions.
“Whilst the situation assessment is on-going, all creditors including depositors will be requested to submit their completed Proof of Debt (PoD) forms with supporting documentation to the Receiver for validation and agreeing as set out above. The receiver also estimates that the process of validating and agreeing to creditor claims will take another 30 days from the date of the deadline for the submission of Creditor claims”, the statement indicated.
The main duties of the Receiver are “to recover and maximise asset realisations for the benefit of creditors including depositors and 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.”
“Following his appointment, the receiver has commenced the process of taking control over these affected microfinance companies, as part of the orderly winding up of the operations of these institutions. He estimates that this assessment will be completed within the next 10 days”, portions of the statement added.
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