The receiver of the microfinance companies collapsed by the central bank, Eric Nipah, has stated that there is no guarantee that the customers of such financial institutions will be able to retrieve their full deposits lodged.
Mr. Nipah speaking in an interview on the Citi Breakfast Show with Bernard Avle stated that the receivership processes also requires that some assets are realised from the collapsed firms in order to support the initial GH¢900 million bailout provided by the government.
With more than 152,000 depositors filling claims in excess of GH¢1.4 billion, he said clearly there is the possibility that the funds provided by the central government will not be enough.
“It will be a tall order to categorically confirm that every depositor or creditor will receive 100 percent payments. We are where we are today because the company is insolvent to start with. It means that the liabilities of the company exceed the assets of the company.
So, it clearly shows that it is not likely to happen and therefore I am not assuring the depositors base and by extension the creditors that over and above what government has voted, they are going to receive 100 percent when it comes to asset realization. No. I am not giving that assurance or guarantee,” he stated.
According to him, he and his team have so far identified the assets of these collapsed companies and are taking steps to ensure that they are recovered and used for the benefits of the depositors as well as creditors.
“We are very clear of the type, form and the location of all these assets to the extent possible. We have taken custody of them. Being an SDI a greater portion of these assets reside in loans, advances, and placements.
We are beginning to engage with some of these third parties that have these placements. We are also conducting an asset quality review to ascertain and establish the true value of these assets and whether they are recoverable.
We are going through these processes and hopefully, we should be able to determine what percentage of realization per claimant can be achieved,” he stated.
Regarding payments, he said due to the weak integrity of the record-keeping of some of these microfinance institutions, a decision was taken to at least put a cap on the payments to individual depositors.
“One of the key things we found out was that there was a lot of underreporting to the extent that the integrity of the financial statements we have come across raise quite a number of issues.
In terms of payments, it’s been one area that you should expect more from us. We have done introspection and we think that from this week onward we still a greater payout ratio.
“Of the GH¢600 million of claims that have been validated, in terms of actual payment that out to be effected we are looking at 90 million. When we took over, we conducted a situational assessment to ascertain the state of affairs of these companies as of May 31, 2019,” he added.