Despite government spending as much as GH¢12 billion on the financial sector clean up, the effect of the exercise has not seemed to trickle down to customers who largely complain about their inability to access their deposits.
The Bank of Ghana’s clean up exercise started with the banking sector where a total of nine banks lost their licenses and continued with the microfinance sector where close to 400 institutions made up of microfinance companies and money lenders were shut down.
The central bank has stated its intention to move into the savings and loans sector for a similar clean up pending the release of funds from the Finance Ministry.
But on Thursday morning, dozens of people who called into the Citi Breakfast Show spoke about difficulties in even accessing their funds lodged with some institutions affected by the cleanup process.
Some customers that called in stated that while they have received their matured investment with some defunct banks now part of the Consolidated Bank, they only got their principal minus interest.
There were also complaints from a number of callers who said their funds with some investment banks, regulated by the Securities and Exchange Commission (SEC), have been locked up for months. They stated that countless visits to these firms have only been met with fresh promises rather than their funds.
Some of the firms cited by callers include FirstBanc Financial Services, Gold Coast Securities, among many others.
One caller narrated how he has had to chase one of the institutions for more than six months just to retrieve his GH¢1,000 investment which remains locked up.
There were also a number of calls addressed to some Finance Houses which are also facing distress and are unable to pay up depositors. Some of these institutions cited include ASN Financial Services, Accent Financial Services, Ideal Financial Services etc.
These customers report that, in some cases, some of these companies have shut down their operations and they are unable to trace their whereabouts.
Even in the case of the recently collapsed microfinance institutions, some customers said the process with the receiver, Eric Nipah of Pwc, remains unclear as to next line of action as no communication whatsoever has been sent to them after the initial validation process.
While Mr. Nipah’s statement following his appointment as receiver for the microfinance companies was silent on affected workers in the sector, some workers that called in narrated how they were promised renewed contracts — a promise which has since not been kept.
The turmoil in the savings and loans sector seem more profound with some callers also making complaints about their inability to access deposits. GN Savings and Loans, a sister company of Gold Coast Securities featured promptly likewise First Allied Savings and Loans, Alpha Capital Savings and Loans among others.
The Bank of Ghana’s impending clean up of that sector is expected to address some of the key issues within the sector. But given the challenges that have arisen from the clean up of the two banking and microfinance sectors, it appears it will take a while for the dust to settle.
Even when the dust settles in the Bank of Ghana regulated companies, the Securities and Exchange Commission would need an action of its own to clear up the mess that investment banks are caught up in.
The narrative was also spared by sporadic mentions of some struggling insurance companies like Esich Insurance which has been having trouble for some time now.