Gov’t spends GH₵17.7bn on S&Ls, MFIs

The government has so far spent about GHS17.7 billion on the clean-up of the financial services sector.

GHS11.65 billion has been used to settle depositors in the banking sector and GHS6.1 billion on the Savings and Loans Companies and Microfinance Institutions.

According to a statement from the Finance Ministry, “We expect that the recent accelerated pace of the prosecutions and an intensification of the civil recovery process under the Receivership will result in substantial recovery of these monies for the Treasury.”

The government, through the Ministry of Finance, on Monday, 24 February 2020, released GHS5 billion to the Receiver of the defunct Savings and Loans and Microfinance Companies, as well as the Official Liquidator of the Microcredit companies through Consolidated Bank Ghana (CBG). This was in a combination of cash and bonds to fully settle all validated claims due depositors of failed Specialised Deposit-Taking Institutions (SDIs).

This intervention, the ministry said, will provide liquidity and guarantee the funds of individuals, businesses, and financial institutions that have been locked up in these defunct financial institutions, pending the completion of the Receivership exercise, adding, with this intervention, all depositors will now be paid in full.

It will be recalled that the Ministry initially provided funds for the Receiver to settle validated depositor claims of the defunct Savings and Loans as well as Finance Houses of up to GH¢20,000 per depositor, with the understanding that the remaining validated claims would be settled as and when value was realised from the sale of the assets of the defunct institutions.

However, due to the slow process of recovery in the receivership process, the Ministry has now made available these additional resources to pay all remaining validated depositors’ funds.

The statement added that all depositors affected should note that the Receiver and Consolidate Bank Ghana will provide them with a detailed plan and procedures to fully settle all outstanding depositor claims in cash and fixed instruments once the claims have been validated in line with the resolution process.