The Bank of Ghana (Lavatory) has revoked the licences of 192 bancrupt microfinance firms.
The Central Financial institution has also revoked licences of an additional 155 insolvent microfinance businesses that have ceased functions.
In a press release Friday, Bog discussed that actions have been taken pursuant to area 123 (1) of the Banking institutions and Specialised Deposit-Having Establishments Act, 2016 (Act 930).
This action requires the Central Bank to revoke the licence of a lender or Specialised Deposit-getting Institution (SDI) in which the Lender of Ghana decides that the establishment is bancrupt or is probably to come to be insolvent within the future 60 days.
Therefore, the Financial institution of Ghana has appointed Eric Nipah as Receiver for the specified establishments in line with segment 123 (2) of Act 930.
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In a related improvement, BoG has with impact from Friday revoked the licences of 29 bancrupt microcredit corporations.
The Lender of Ghana has also revoked the licences of 10 insolvent microcredit businesses that have ceased functions.
In accordance to the Bog, its action is pursuant to segment 7 of the Non-Bank Fiscal Institutions Act, 2008 (Act 774), which mandates it to revoke the licence of a non-financial institution economic institution (NBFI) accredited.
Below that Act if that institution among other issues ceases to have on business or ceases to fulfill a qualification under the Act or contravenes any provision of the Act or principles or directives issued by the Financial institution of Ghana.
The Lender of Ghana has also notified the Registrar of Firms at the Registrar General’s Section of the revocation of these licences and has requested that the Registrar commence winding-up proceedings towards these providers.
A full of 70 microcredit businesses were certified by the Bank of Ghana from 2011 till the close of 2015 under Act 774, to deliver microloans.
Serious undercapitalization, lousy lending and danger management techniques, and inadequate company governance tactics ended up amongst lots of other factors accounting for the bad efficiency and eventual collapse of the 39 unsuccessful institutions whose licences have been revoked.
Despite notices issued to the impacted institutions by the Bank of Ghana in excess of the last few decades requiring remediation of determined regulatory violations and other supervisory fears, these institutions unsuccessful to address the problems introduced to their awareness.
Adhering to the revocation of the licences of these institutions, a whole selection of 31 microcredit corporations will proceed to run. Likely forward, the Lender of Ghana is strengthening its regulatory and supervisory framework, and advertising self esteem in the microcredit sector.
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