Gov’t releases GH₵3.5bn to pay depositors of collapsed financial institutions in full

Government says it has released GH₵3.5bn as a refund to depositors of collapsed financial institutions.

A statement from the Finance Ministry confirmed the government has scrapped a much criticised plan to issue a 5-year bond to the depositors at no interest.

The release of the funds was expected after Vice-President Dr. Mahamudu Bawumia signaled a u-turn following complaints from the customers who said paying back in bonds was unfair.

The customers are part of the client base of some 15 savings and loans companies, eight finance houses, 347 microfinance institutions, 39 microcredit institutions, one leasing company, and one remittance company that lost their licences between 2018 and 2019.

The Receiver of the collapsed microfinance companies, savings and loans, and finance houses, Mr Eric Nana Nipah, proceeding with payment options of the affected customers.

Welcoming the decision, Mr. Tweneboah Kodua of the Ghana Association of Savings and Loans companies said “this is very good news.”

He said the affected clients are among the hardest hit by the coronavirus pandemic. The government’s u-turn, he indicated, “has come at the right time”.

“Better late than never,” he said.

The change in plans comes after pressure from customers of these failed institutions. Some threatened to make the matter an electoral issue.

The opposition NDC promised to pay affected customers in full within the first year of a future Mahama government.