MICROCAPITAL BRIEF: Bank of Ghana Revokes Licenses of 23 Microfinance Banks Due to Insolvency

The Bank of Ghana (BOG) recently revoked the licenses of 23 microfinance banks (MFBs) that became insolvent and remained so despite being given additional time to seek fresh capital from investors. The MFBs reportedly will be able to refund customer deposits over the course of several rounds, up to a maximum of GHS 10,000 (USD 1,830) per depositor in the first round. However, some depositors have voiced concern that their banks only plan to repay principal, without accrued interest.

For more information on deposits at risk in Ghana, as well as World Bank efforts to strengthen the country’s financial system, please refer to MicroCapital’s June story, “MASLOC Halves Interest Rates to 12% as Bank of Ghana Starts $172m Bailout of Private Microfinance Industry.”

Established in 1957, the BOG has regulatory and supervisory authority over banking and other financial institutions in Ghana, including rural and community banks, savings and loan companies and credit unions. The mandate of BOG is to “maintain stability in the general level of prices, to ensure efficient operations of the banking and credit systems, and to support general economic growth.” BOG uses monetary and fiscal policies to achieve its mandate, acts as a banker and financial adviser to the government, and performs annual on-site audits of the microfinance institutions within its purview through its Other Financial Institutions Supervisory Department. As of year-end 2018, BOG has total assets of GHS 59.1 billion (USD 10.8 billion).

By Eugene DeCosse, Research Associate

Sources and Additional Resources

Business and Financial Times article
https://thebftonline.com/2019/editors-pick/bog-revokes-licenses-of-23-sl-companies/

Graphic Online article
https://www.graphic.com.gh/business/business-news/ghana-news-relief-for-clients-of-microfinance-firms-23-to-pay-customers-their-due-move-to-relieve-state-taxpayer.html

Bank of Ghana homepage
https://www.bog.gov.gh/

Bank of Ghana annual reports
https://www.bog.gov.gh/statistics/publication/annual-report

MICROCAPITAL BRIEF: MASLOC Halves Interest Rates to 12% as Bank of Ghana Starts $172m Bailout of Private Microfinance Industry
https://www.microcapital.org/microcapital-brief-masloc-halves-interest-rates-to-12-as-bank-of-ghana-starts-172m-bailout-of-private-microfinance-industry/

MICROCAPITAL BRIEF: Bank of Ghana to Link Mobile Money Platforms
https://www.microcapital.org/microcapital-brief-bank-of-ghana-to-link-mobile-money-platforms/

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