Customers of defunct microfinance companies (MFCs) and Savings and loans companies (SLCs) are expected to receive final payments of their funds by end of this week, Vice President, Dr Mahamudu Bawumia has announced.
“As of yesterday, I understand that we have raised enough liquidity to take care of remaining customers of these companies including DKM and others, and by end of this week, payment should begin.
“So far, about 98 per cent of depositors have received their money in cash and bonds and the Finance Ministry together with the Bank of Ghana (BoG) is working on the modalities on payment,” he said.
The Vice President was speaking in an interview with Accra based Peace FM monitored by the Ghanaian Times in Accra yesterday.
Justifying the banking sector cleanup, Dr Bawumia indicated that government had expended over one billion dollars in the sector to keep the financial institutions solvent, but the support was used for other purposes.
“The National Democratic Congress (NDC) was aware of the problem, but they were trying to manage it and it wasn’t working.
“By the time we got into office things were unravelling, we were on the brink of the collapse of the system, so the BoG had to rescue the situation and this is one of the most important acts that have been done to save the economy,” he stated.
Touting government’s achievement in building a robust economy, Dr Bawumia said, the New Patriotic Party (NPP) administration had attained “superior records” in all sectors in its three-and-half years of assuming office, as against the NDC.
“We brought down fiscal deficit from 6.8 to 4.8 per cent. Between 2016 and 2019, we had surpluses for three consecutive years and for the first time in a decade, increase in our debt stocks has also slowed down. We have seen decline in inflation, interest rate and lending rate from 32 to 23 per cent.
“Our exchange rate depreciation has been halved to 50 per cent, less compared to what we inherited, and that is a major achievement,” he stated.
The Vice President noted that, though the outbreak of the coronavirus disease (COVID-19) has had adverse impact on the economy, it had not derailed gains made.
According to him, “the strong fundamentals that we had put in place put us in the position to weather the storm, that is why we are able to roll out interventions like the free meals, free utilities, among others to cushion Ghanaians in this crisis.”
“COVID-19 has delayed what we wanted to do, but did not derail the gains we have made and we hope to have the economy bounced back as soon as possible,” Dr Bawumia said.
The Bank of Ghana revoked the licences of 347 microfinance companies and that of 23 savings and loans and finance house companies in 2019, citing insolvency, mismanagement and fraud in some cases.
The exercise was part of the financial sector cleanup by the central bank, which also saw some eight banks losing their licences between 2017 and 2019.
The government justified the cleansing exercise, arguing the banks would have, otherwise, collapsed and the deposits of more than a million clients would have gone down the drain.
BY ABIGAIL ANNOH
