The Bank of Ghana (BoG) has revealed that 37 percent of licensed Micro Finance Institutions that entered 2018 are distressed or have collapsed.<\/p>\n
This has contributed to the\u00a0GH\u023c740.5 million which is owed to an estimated 705,396 depositors in distressed or folded up Micro Finance Institutions (MFIs)\u00a0 and Rural and Community Banks (RCBs).<\/p>\n
[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.<\/p>\n
According to the BoG, the distress in this sub-sector has been characterized by \u201cseverely impaired capital; inability to meet regulatory capital adequacy requirement; generally low asset quality; and liquidity crises.\u201d<\/p>\n
\u201cThese have culminated in threats to depositors\u2019 funds thus eroding public confidence and undermining efforts to promote financial inclusion,\u201d the statement added.<\/p>\n
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.<\/p>\n
Also, out of the total number of 141\u00a0rural and community banks, 37 are active but distressed or folded up.<\/p>\n
“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 GH\u023c740.5 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.\u201d<\/p>\n
Sanitising Microfinance sub-sector\u00a0<\/b><\/p>\n
Earlier in March, the BoG said it was to outline new reforms to sanitize Ghana\u2019s microfinance industry.<\/p>\n
The reforms are expected to among other things provide a comprehensive plan by the central bank to improve activities in the microfinance industry.<\/p>\n
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.<\/p>\n
In a publication, the BoG said there were 319 microfinance institutions.<\/p>\n
A\u00a0further breakdown showed that there were 40 money lending institutions, six\u00a0 Financial NGOs as well as two hundred and seventy-three (273) microfinance institutions.<\/p>\n
The\u00a0central bank has said it will not issue any license this year for\u00a0microfinance institutions.<\/p>\n
–<\/p>\n
By: Delali Adogla-Bessa\/citifmonline.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"
The Bank of Ghana (BoG) has revealed that 37 percent of licensed Micro Finance Institutions that entered 2018 are distressed or have collapsed. This has contributed to the\u00a0GH\u023c740.5 million which is owed to an estimated 705,396 depositors in distressed or folded up Micro Finance Institutions (MFIs)\u00a0 and Rural and Community Banks (RCBs). [contextly_sidebar id=”S5usHpl5MeheE3veAs77hQVbcgLEWILL”]The BoG […]<\/p>\n","protected":false},"author":14,"featured_media":389844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,11],"tags":[1144,3,5725,18170],"yoast_head":"\n