This has contributed to the GHȼ740.5 million which is owed to an estimated 705,396 depositors in distressed or folded up Micro Finance Institutions (MFIs)  and Rural and Community Banks (RCBs).

[contextly_sidebar id=”S5usHpl5MeheE3veAs77hQVbcgLEWILL”]The BoG governor in a statement warned that the problems in the financial sector are not restricted to just banking, following the insolvency of uniBank and the 2017 collapse of UT Bank and Capital Bank.

According to the BoG, the distress in this sub-sector has been characterized by “severely impaired capital; inability to meet regulatory capital adequacy requirement; generally low asset quality; and liquidity crises.”

“These have culminated in threats to depositors’ funds thus eroding public confidence and undermining efforts to promote financial inclusion,” the statement added.

Using figures to highlight the precarious situation in the financial sector, the BoG said of the total number of 566 licensed Micro Finance Institutions in 2018, 211 are active but distressed or have folded up.

Also, out of the total number of 141 rural and community banks, 37 are active but distressed or folded up.

“In total, it is estimated that 272 out of the 707 institutions in the sub-sector, representing 38.5% are at risk.This indicates that approximately GHȼ740.5 million is owed to an estimated 705,396 depositors of the distressed or folded up MFIs and RCBs. In terms of significance, the deposits under distress form 8.81% and 52.49% of industry total deposits of RCBs and MFIs respectively.”

Sanitising Microfinance sub-sector 

Earlier in March, the BoG said it was to outline new reforms to sanitize Ghana’s microfinance industry.

The reforms are expected to among other things provide a comprehensive plan by the central bank to improve activities in the microfinance industry.

It also comes on the back of reports of customers losing their investments to some microfinance institutions when their operations have been suspended over inefficiencies.

In a publication, the BoG said there were 319 microfinance institutions.

A further breakdown showed that there were 40 money lending institutions, six  Financial NGOs as well as two hundred and seventy-three (273) microfinance institutions.

The central bank has said it will not issue any license this year for microfinance institutions.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Ailing Microfinance firms owe 700,000 depositors GHȼ740m – BoG appeared first on Citi 97.3 FM - Relevant Radio. Always.

His appointment is however subject to consultation with the Council of State.

[contextly_sidebar id=”sDQetgK9htPwqdcj2ORPe769axyyQSEF”]A statement signed by the Director of Communications at the Presidency, Eugene Arhin, said Dr. Addison’s appointment follows the resignation of Dr. Abdul Nashiru Issahaku effective Saturday, 1^st April, 2017.

“In order not to have a vacuum at the top of such an important state institution, the President, in accordance with Article 183 (4) (a) of the constitution, has appointed Dr. Ernest Kwamina Yedu Addison as Governor of the Bank of Ghana, subject to consultation with the Council of State,” the statement said.

Dr. Issahaku on Monday indicated his resignation from office after almost a year in charge. Dr. Issahaku assumed office in April 2016 following his appointment by former President John Mahama, after the early retirement of Dr. Henry Kofi Wampah.

He has since embarked on a number of initiatives to improve the country’s monetary policy regime.

Under his administration, the Monetary Policy Committee of the Bank of Ghana reduced the policy rate twice; the latest being the 200 basis point reduction on Monday, 27^th March, 2017.

About Dr. Addison

Dr. Addison was until his appointment, the Lead Regional Economist of the African Development Bank, at its Southern African Resource Centre.

From 2003 to 2011, he served as the Director of Research at the Bank of Ghana and was the Chief Economist of the West African Monetary Institute from 2001 to 2002.

Dr. Addison, an Economics graduate of the University of Ghana, Legon, holds an M.Phil  in Economics and Politics from the University of Cambridge, England.

He also holds a PhD in Economics from McGill University, Canada.

Speaking to Citi Business News on his expectations of the new Governor, Economist Dr. Lord Mensah, stressed the need to work to maintain economic stability.

“The indicators are good on the ground so for anybody who takes over, I expect him to maintain them as such. Also, all the indicators such as inflation and interest rates are showing a downwards trend and then also interest rate has started coming down,” he said.

“In addition, a governor that comes in should be able to maintain our foreign exchange and of course we expect that as a governor that is your mandate and through the Central Bank, there are actions,” Dr. Mensah added.

The Minister of Monitoring and Evaluation, Dr. Anthony Akoto Osei, also says he is confident Dr. Addison’s former stint with the Central Bank should reflect in his inefficiencies as Governor.

“Dr. Addison would have to come and examine the current monetary policy situation, and having been a director of research, I’m sure he can tell what new directions they might be taking but he is capable of doing that.”

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Dr. Ernest Addison is new BoG Governor appeared first on Citi 97.3 FM - Relevant Radio. Always.