Gov’t Moves to Protect Microfinance Depositors
Government has initiated moves to protect small and unsophisticated depositors in the country by securing a €14m loan facility from the Kreditanstalt fur Wiederaufbau (KFW), Frankfurt am Main, Germany.
The loan facility is for the establishment of a Deposit Protection Scheme.
The Scheme is intended among other things to protect depositors’ money in the microfinance sector.
The country has recently been rocked with several incidents of microfinance institutions collapsing and bolting away with depositors’ money.
In order to protect depositors in such situations, a Loan and Financing Agreement was laid in the House on the 2nd of March, 2018 by the Minister of Roads and Highways, Kwesi Amoako-Atta on behalf of the Minister of Finance.
The Loan Agreement was aimed at providing funds for the establishment of a Deposit Protection Fund, to protect depositors from loss in the case of a bank failure.
It will also support the Bank of Ghana in meeting one of its objectives of fostering the soundness, solvency and efficient functioning of a stable, market-based financial system in Ghana.
As part of measures aimed at sustaining the scheme, banks and specialized deposit taking institutions licensed by the Bank of Ghana would be required under Act 931 to make premium payments to the fund.
The Committee in presenting their report was of the view that the move would make an important contribution to the maintenance of a sound and stable banking sector.
Source: thePublisher
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