700,000 Ghanaians could lose $160m deposits

The deposits of more than 700,000 people in Ghana are under threat amid a crisis in the country's financial sector.

The Central Bank paints a grim picture of a financial sector in desperate need of help after it emerged microfinance institutions and the Rural and Community Banks owe the depositors more than $160m (£113m).

More than 200 of the country's 566 licensed microfinance institutions - which provide loans to small businesses - have registered as being in distress or have collapsed.

In the banking sector, 37 out of 141 rural and community banks are facing the same fate.

Earlier this week the Central Bank stepped in to prevent the local uniBank from imminent collapse after it suffered persistent cash shortfalls and regularly fell below cash reserve requirements.

The Central Bank says it had to act to protect depositors and other creditors - and to rein in further risks to the country's wider financial system.

It revoked the licenses of two other local banks last year for similar reasons.

It is now making plans to prevent any further problems, announcing reforms to the microfinance sector hoping to improve their performance and safeguard the funds investors and depositors.