Gov’t Can’t Be Able To Pay-Off DKM Customers As Promised – Economist

DKM Customers who are relying on government to retrieve their locked-up funds may have their hopes crushed, as government may not be in a good position to do so.

According to Professor Godfred Bokpin – a Professor of Economics and Finance – in a radio interview, government does not have enough financial capacity to pay-off customers of defunct Diamond Microfinance Limited (DKM).

He said for government to serve this purpose effectively, it would have to borrow money to settle these debts – which also comes with its own domino-effect.

His comment comes after Vice President Dr Mahamudu Bawumia assured depositors whose funds have been locked-up in regulated but defunct financial institutions including customers of DKM that the government will pay them in full.

“The government has asked the receiver (working with the Bank of Ghana) to expedite the validation and payment of depositors so that all depositors will receive their monies after validation.

“I will also like to add that this refund will also extend to customers of DKM who have not as yet received the full refund of their deposits. We are therefore cleaning up the mess the NDC created in the financial sector,” the Veep said at the Town Hall and Results Fair in Kumasi on Tuesday.

But Professor Bokpin told the host of Joy FM’s Super Morning Show, Daniel Dadzie, that the debts, when paid, will be loaded onto the public debt.

He said the Akufo-Addo government may have identified the displeasure of Ghanaians after taking what some have termed as “punitive measures” by shutting down the defunct financial institutions.

Thus, “a high level of assurance from the Vice President is needed to calm tempers as they all gear into the political campaign,” he explained.

Background

In 2015, the Bank of Ghana halted activities of the Diamond Microfinance Limited (DKM) following concerns over violation of the microfinance regulations.

DKM allegedly invested the millions from customers’ deposits into its subsidiaries – DK Airlines, DKM Transport, DKM Mining Company, DKM Shea Butter Company, DKM Fuel Station and a host of others.

In July 2019 the Registrar-General, the Official Liquidator for defunct Diamond Microfinance Limited (DKM), announced that it would from 1st August begin the payment process of dividends to depositors who submitted new claims.

There have been reports of suicide and depression on the part of some customers who lost their monies in the DKM saga, after the company’s liquidation.