Customers of defunct financial institutions plead for locked-up funds

Some aggrieved customers of defunct financial institutions in the Bono Region have sent an SOS message to the Bank of Ghana and Security and Exchange Commission (SEC), for government to expedite action on the payment of locked up funds to help ease their excruciating plight.

According to the group, systematic collapse of the financial institutions and continuous delay in releasing locked up funds have rendered helpless depositors “economically impotent, useless and redundant”.

The aggrieved group comprises about 2,221 depositors of collapsed investment banks, commercial banks, Savings and Loans companies, and microfinance institutions. The victims are largely operators of micro and small enterprises across the Bono Region.

It will be recalled that since 2017 the Bank of Ghana has embarked on a comprehensive banking sector reform, resulting in the collapse of about 16 universal banks. While some banks had their licenses revoked, others merged due to their inability to meet the GH¢400million minimum capital requirement.

As part of the clean-up, the BoG also revoked the licences of 23 savings and loans and finance house companies, and 386 microfinance institutions. In a response to the failure of some fund management companies to pay clients their funds, SEC in November 2019 revoked the licences of 53 firms for violating investment rules.

Efforts are ongoing to pay the affected customers and depositors of these distressed financial institutions. The Ministry of Finance has spent billions of cedis on the financial sector resolution process. Earlier in the year, President Nana Addo Dankwa Akufo-Addo in his state of the nation address before Parliament categorically stated that all depositors of S&LCs and microfinance institutions – including DKM which collapsed in 2015 – would receive 100 percent of their deposits, subject to a thorough validation exercise.

Addressing a news conference in Sunyani, the Convener of the aggrieved customers in Bono Region, Nicholas Saddari, however claimed the victims are yet to receive their monies; thus bestowing unbearable hardship on them.

“Many of our businesses have collapsed; we lost our loved ones who died from the shock and pain of losing their lifetime investments and savings; and many could not pay their medical bills. A good number of us with underlying health conditions couldn’t cope with the financial pressures associated with healthcare.

“Our wives have also deserted us and taken our children to other men, because we could not properly take care of them and honour our marital responsibilities with dignity as fathers and husbands anymore.”

The concerned group, he noted, gives government a two-week ultimatum to initiate a better alternative payment plan and eventual payment of locked up monies or face their wrath – indicating that the current deposits and investment payment plans and schedules are in bad taste.