The receiver of the 347 insolvent microfinance companies whose licences were revoked on Friday, May 31, 2019, Mr Eric Nana Nipah of Pricewaterhouse Coopers (PwC), plans to institute civil action against owners of the collapsed companies to recover lost funds.
This comes as the receiver begins processes to take control of the affected companies.
A source at the Bank of Ghana (BoG) said the decision was part of the orderly winding up of the collapsed institutions.
Mr Nipah plans to complete the assessment of the assets and liabilities of the collapsed microfinance companies within 10 days.
“Any persons found to have contributed to the failure of these institutions will be reported to the law enforcement agencies for further action, including possible prosecution, where necessary,” the source said.
It said while the assessment of the debts and liabilities was ongoing, all creditors, including depositors, would be required to submit proof of debt forms and other supporting documents for validation.
The BoG has revoked the licences of 347 insolvent microfinance companies due to liquidity challenges.
Out of the number, 192 were insolvent but in operation, while 155 that were insolvent had ceased operations.
The latest action by the BoG has left the country with 137 microfinance companies standing, from the about 566 previously.
In addition to the collapse of the microfinance companies, the licences of 39 micro-credit companies, also known as money lenders, have been revoked.
They are made up of 10 companies that were insolvent and had ceased operations and 29 other insolvent ones.
The BoG consequently appointed Mr Nipah as receiver for the specified institutions, in line with Section 123 (2) of Act 930.
Payments to depositors
But a statement from the receiver said payments to all depositors of the collapsed companies would be made from the GH¢900 million received from the government to save depositors.
According to the statement, payments to other creditors of the collapsed finance houses would be paid from proceeds from the disposal of the assets of the companies.
“For the class of other creditors, excluding depositors, depending on the quantum and timing of asset realizations in the receivership of the affected microfinance companies, the receiver will declare and pay dividends to this class of creditors in accordance with the order of ranking of creditors provided in the relevant sections of Act 930,” it stated.
These measures are part of a Creditor Administration process to ensure that the receiver is able to determine the indebtedness of affected microfinance companies to their body of creditors, as well as the order of ranking of these creditors for dividend distribution.
Proof of deposits
The BoG source said any depositor whose name was not captured in the records of the affected institution could still present proof of deposit in his or her possession to the receiver for validation.
“Once it has been properly validated, you will be paid in accordance with the arrangements set out in the priority of payments in Section 135 of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930),” it said.
It said the BoG did not anticipate any job losses, since more than 200 of the affected institutions had already ceased operations before their licences were revoked.
“As a result, they have no employees currently and there will be no job losses from the revocation of their licences, per the records available to us at the central bank.
“Even for the insolvent institutions that had not ceased operations, the BoG does not anticipate a lot of job losses, as many of them had downsized their operations,” the source added.
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