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The revocation of the licences of some microfinance companies in Ghana is meant to protect customers’ savings, Dr Joseph Amoa-Awuah, Head of Other Financial Institutions at the Bank of Ghana (BoG), has said.

According to him, the central bank needed to be proactive in order to protect the investment of hardworking Ghanaians.

Dr Amoa-Awuah told Kwabena Prah Jnr (The Don) on Ghana Yensom on Accra 100.5FM on Tuesday, 4 June 2019 that: “There was the need to salvage depositors’ funds.”

He added: “The receiver is going to do his work. He is going to make specific information available.”

The BoG has revoked the operating licences of some 347 microfinance companies, which, it says, are insolvent or had folded up.

Also, the BoG has, with effect from Friday, revoked the licences of 29 insolvent microcredit companies as well as 10 insolvent microcredit companies that have ceased operations.

According to the BoG, its action is pursuant to section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates it to revoke the licence of a non-bank financial institution (NBFI) licensed.

In a statement issued on Friday, 31 May 2019, the central bank said it has, “with effect from today, revoked the licences of 192 insolvent microfinance companies”.

“In addition”, the statement added, the “licences of another 155 insolvent microfinance companies that have ceased operations have been revoked”.

“These actions were taken pursuant to 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 or is likely to become insolvent within the next 60 days.

“Consequently, the Bank of Ghana has appointed Mr. Eric Nipah as Receiver for the specified institutions in line with section 123 (2) of Act 930.

“The revocation of the licences of these institutions is to get rid of insolvent and dormant institutions that have no reasonable prospects of rehabilitation and have denied depositors access to their deposits, thereby constituting a threat to the stability of the financial system”, the statement said.

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