The Receiver of the 347 defunct Microfinance companies, 23 Savings and Loans and Finance Houses, Eric Nana Nipah says money to pay ex-staff is available, but payment can only be done when issues raised by the ex-staff and their representatives are resolved.
He made the comments on Citi TV‘s Current Affairs program The Point of View.
This follows calls by former employees of the defunct companies, who say they are struggling to get by and thus are urging government to provide a package for them as has been done for depositors.
But according to Mr. Nipah the issues preventing the payment of the ex-staff largely emanates from the staff themselves and their representatives.
“The payment of ex-staff depends on the ex-staff and the representatives. I have money in the coffers, about GHC 160 million plus for the payment of ex-staff. When we calculate how much is due these former staff we run it through their representatives and some of them raise issues which need to be resolved. And until these issues are resolved we can’t pay them.”
GHS3.56 billion cash released to settle remaining customers of collapsed Microfinance firms, others
Government has released GHS3.56 billion in cash to fully settle depositor claims of 347 defunct Microfinance companies, 23 Savings and Loans firms and Finance Houses that were being settled with bonds.
The money will be ready for the depositors from Wednesday, September 16, 2020, according to a statement from the Receiver of these defunct firms.
“Notice is hereby given that with effect from Wednesday 16 September 2020, affected depositors may contact any branch of Consolidated Bank Ghana Ltd (“CBG”) the paying bank to access their newly created Cash accounts which were originally designated as Commercial Paper (Bond) accounts at the bank,” the statement from the Receiver announced.
GHS6.07 billion had already been released to some depositors of these resolved companies in cash and bonds.
This had left about GHS402 million to be paid to the remaining depositors.
Of the GHS6.49 billion required to fully settle all valid depositor claims, about GHS3.56 billion of these claims were initially settled with Government-backed bonds.
But there were concerns that this method, the non-interest-bearing nature of the bond and tenor of five years, “does not make the Bond commercially attractive, thus creating a significant loss in value of their claims to them.”
“Sensitive to these concerns and in order to provide additional liquidity to the financial sector, Government has made available to the Receiver/Official Liquidator additional cash amounting to approx. GHS3.56billion,” the statement said.
Thus the depositors who were to be paid in the bond will now “receive cash payments at no discount for the Commercial Paper they have either received or is due to them.”
On May 31, 2019, 347 microfinance companies had their license revoked by the Bank of Ghana as part of the financial sector cleanup.
The Bank of Ghana, in August 2019, also revoked the licences of 23 insolvent Savings and Loans companies and Finance Houses.
These actions were in line with 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.