About 741 million cedis is estimated to be locked up in over two hundred microfinance companies as well as rural and community banks, making it difficult for customers to have access to their investments.<\/p>\n
This is the revelation from the latest state of the banking sector report released by the Bank of Ghana.<\/p>\n
According to the document, the estimated amount locked up, represents 61 percent of all industry deposits of the microfinance companies and rural and community banks.<\/p>\n
A breakdown of the amount also means the 705,396 customers affected, are owed about one thousand cedis (GH\u00a21,049) each.<\/p>\n
According to the central bank, about a third of the 566 licensed microfinance institutions representing 211, are active but distressed or folded up.<\/p>\n
Also, about a quarter of the 141 Rural and Community Banks, representing 37, are active but distressed or folded up.<\/p>\n
Explaining possible reasons accounting for this development, the Governor of the Bank of Ghana, Dr. Ernest Addison cited severely impaired capital; inability to meet regulatory capital adequacy requirement; generally low asset quality; as well as liquidity crises.<\/p>\n
\u201cThese owner\/CEOs and related Executive and Non-Executive Directors were largely responsible for credit extension and consistently breached related party transaction limits by extending credits to themselves and relations, and in some cases approved fictitious placements with related and connected companies. Unfortunately, these activities were usually rubber-stamped and sanctioned by the boards and board chairs.\u201d<\/p>\n
Though Dr. Addison maintains that he inherited a financial sector that had been in a considerable state of turmoil with the DKM crisis in 2016, the central bank will work to turn around the fortunes of the sector.<\/p>\n
\u201cI assumed the position of Governor in April, 2017. At the time the financial sector had been in a considerable state of turmoil with the DKM crisis in 2016 and nine banks already identified as undercapitalized after the Asset Quality Review (AQR) exercise undertaken by the Bank of Ghana. We immediately began work and tasked the undercapitalized banks to submit recapitalization plans and worked to implement same.\u201d<\/p>\n
–<\/p>\n
By: Pius Amihere Eduku\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"
About 741 million cedis is estimated to be locked up in over two hundred microfinance companies as well as rural and community banks, making it difficult for customers to have access to their investments. This is the revelation from the latest state of the banking sector report released by the Bank of Ghana. According to […]<\/p>\n","protected":false},"author":14,"featured_media":389844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,171,11],"tags":[],"yoast_head":"\n