Government, World Bank set to support depositors of insolvent microfinance firms

Deputy Minister of Finance, Charles Adu Boahen has disclosed that government has agreed with the World Bank to support depositors of some insolvent micro finance institutions in the country.

Though it is not clear how the deal would be structured, Mr Adu Boahen believes the World Bank will make available some funds for the central bank to bail out depositors of these insolvent institutions.

Mr Adu Boahen said, “In fact, the World Bank in recognising what we are doing and wanting to show their full support increased the budget support they usually give us from $150 million to $250 million.”

He made the disclosure when responding to a question on government’s support to the savings and loans sector at the JoyBusiness Financial Forum in Accra.

The bail-out is part of the World Bank’s programme to support enterprises to alleviate poverty among its member countries.

“We are hopeful that the agreement with the World Bank will help us inject some capital to bail out some of these struggling micro finance institutions with potential,” he noted.

The Bank of Ghana has hinted of a decision to begin a stringent measure to clean up the microfinance sector by introducing new reforms that will make the sector strong and boost confidence.

A move that has received support from the World Bank.