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Business News of Thursday, 17 September 2020

Source: www.ghanaweb.com

Receiver uncovers massive shortfall in asset base of defunct microfinance firms

The Receiver of the defunct microfinance and savings and loans companies has disclosed that there is a huge shortfall in the asset base of the collapsed firms.

Eric Nana Nipah, who is the Receiver for 347 defunct microfinance companies, 23 savings and loans and finance houses, said rough estimates put the shortfall at GH¢4 billion.

He told Citi News that although by the claims of the firms, total asset base was estimated at GH¢6 billion, an assessment of their books reveals less than GH¢2 billion in assets.

“What I found was quite sorrowful; sorrowful in terms of the fact that although the balance sheets of these companies indicated that they had an asset base in excess of GH¢6 billion, actually, based on my assessment, I do not think they are up to even GH¢ 2 billion,” Mr Nipah is quoted in a report by Citi News.

He added: “a lot of these assets that were purported to be there were actually not there. When we did our examination, we also noted that quite a number of them had been diverted.”

Meanwhile, assets worth about GH¢500 million have been recovered by Economic and Organised Crimes Office (EOCO), the Receiver disclosed in July 2020.

The Receiver was engaged by the state in 2019 when 347 microfinance companies had their licences revoked by the Bank of Ghana as part of the financial sector clean-up.

The Bank of Ghana, on August 16, 2019, also revoked the licences of 23 insolvent Savings and Loans companies and Finance Houses.

These actions were in line with Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.

Depositors affected by this action have made claims of up to around GH¢8.25 billion.

The government says so far GH¢ 6.5 billion has been settled.



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