Collapse of 347 microfinance companies: Gh₵30 million worth of claims paid

The Receiver of the 347 collapsed microfinance companies, Eric Nana Nipah, says he has paid close to about Gh₵30 million worth of claims to affected depositors.

According to him, he has received close to 152,000 depositor claims worth about GH₵1.4 billion.

He said, so far, he has been able to validate about 80,000 of the claims which amount to about GH₵600 million.

It will be recalled that the Bank of Ghana (BoG) in May revoked the licenses of 347 insolvent microfinance companies.

The licences of 192 of them were revoked in addition to that of another 155 that have ceased operations.

According to the BoG, the revocation of the licences of these institutions was to get rid of insolvent and dormant institutions that have no reasonable prospects of rehabilitation and have denied depositors access to their deposits, thereby constituting a threat to the stability of the financial system.

Mr Nipah was subsequently appointed receiver of the collapsed companies.

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GH₵10,000 cap

Commenting on claims by some affected depositors that they were being paid only GH₵10,000 of their total claims, Mr Nipah said the decision to place a cap on the amount to be paid was based on findings from a preliminary assessment of the situation of the collapsed finance institutions.

“We’ve noted a considerable amount of under reporting and therefore the integrity of the financial statements that we’ve come across raise a number of issues. A lot of the deposits were under reported for obvious reasons.

“Based on a preliminary assessment of what we were seeing on the ground, what we decided to do in ensuring a balance between timeliness and effectiveness of payment and ensuring scrutiny and accuracy of validation, we decided that we would put in a cap of GH₵10,000 and make payment of claims up to GH₵10,000 than to rush to pay-out and short change some legitimate claimants,” he said in an interview on Accra-based Citi FM.

20 companies to settle depositors

Mr Nipah said although government had provided about GH₵900 million to be paid to depositors, 20 of the collapsed institutions have indicated their willingness to make a 100 per cent payment to all their creditors including depositors.

“We have been engaging with them, and if we look at the number of depositors that we are looking at in this segment, it is close to 6000 in number and the value of these deposits, those that have been received are in excess of a GH100 million.

“This subset relates to operators who have come out to say that they do not need government funds to settle their depositor obligations that they are able to pay a 100 per cent from their own resources. We’ve engaged with them and I’m satisfied that they have the means to pay a 100 per cent of their total liabilities,” he said.

Cannot assure 100 per cent payment

Mr Nipah also indicated that there was no guarantee that affected depositors and creditors would receive a 100 per cent payment of their claims.

“Where we are now, is that we’ve taken control of a lot of these assets and we are getting ready to sell them so that we extract value out of them and pay the creditors. It will be a tall order to categorically confirm that every creditor or depositor will receive a 100 per cent payment.

“We are where we are today because the company is insolvent to start with and if the company is insolvent, it means that the liabilities of the company exceeds the assets of the company. So, it clearly shows that it’s not likely to happen and therefore, I’m not assuring the depositor base and by extension the creditors that over and above what government has voted, they are going to receive a 100 per cent when it comes to asset realisation. No, I’m not giving that assurance or guarantee,” he stressed.