Receiver To Pay Depositors Of Resolved S&L Firms By End Of July

The Receiver of the defunct 347 Micro Finance Companies, 23 Savings and Loans and Finance Houses, Eric Nana Nipah, says customers who have not received their claims, should be able to access them by the end of July this year.

According to Mr. Nipah, he has already paid about 96% of customers, and is hopeful of completing the remainder by the end of this month.

Speaking in an interview with Citi FM in Accra yesterday, Mr. Nipah also said he has been able to save the country 1 billion cedis by scrutinizing fictitious claims.

“For depositors, we have come a very long way and I have been able to determine that actually, the depositor base in the three receiverships is in the region of GHS 5.4 billion by value of valid depositor claims that I have received. And out of that, I have been able to pay close to 96% of these claims,” he said.

He also noted that about 98% of all the depositor claims will be paid in cash, while the remaining 2% will be paid through a combination of cash and bonds.

“I am on course to fully pay 98% of all depositor claims by way of cash. The two per cent that remains is being paid through a combination of cash and commercial paper which we commonly refer to as bonds”.

He further noted that, “through the very effective and robust validation mechanism that I have put in place, I have also been able to save the nation close to a billion cedis by way of robust and resilient validation processes,” he added.

Meanwhile, former employees of the defunct microfinance and savings and loans as well as finance houses are to be paid their outstanding salaries as well as negotiated and agreed exit packages.

The Receiver, Eric Nana Nipah, who disclosed this in a recent statement, said beginning Monday, July 13, 2020, there would be an engagement with the authorized representatives of the ex-staff to agree on modalities for the payment of outstanding salaries and exit packages to ex-staff of these resolved institutions.

It said in line with the hierarchy of creditor claims set out under Act 930, other creditors of the failed institutions would be settled by the Receiver upon validation of their claims and also to the extent that the Receiver is able to realize value from the remaining assets of such institutions.

However, the Receiver said while tracing stashed capital of the defunct entities it had approached the Bank of Ghana (BoG) for a bail out to settle the affected workers.

In accordance with Section 123 of Act 930, the BoG appointed Eric Nana Nipah as Receiver for some 347 microfinance companies as well as 23 savings and loans and finance houses whose licences were revoked on May 31, 2019, and August 16, 2019, respectively.

“Accordingly, the Receiver is compelled to undertake a detailed assets tracing and forensics exercise in collaboration with the Economic and Organized Crime Organization (EOCO) to locate and recover these assets. The consequence in pursuing this recovery route is that creditor claims including employee related claims in the resolution of the affected MFCs and S&Ls are not likely to be settled any time soon.

“To ameliorate the economic impact of the resolution exercise on former employees of these affected companies particularly in these times of Covid-19, BoG has agreed to pre-finance the full settlement of employee related claims which otherwise rank as unsecured claims in the receiverships of these companies,” statement noted.

The statement added that “the Receiver will only fully settle outstanding salaries and exit packages of ex-staff which have been duly validated and agreed upon in the resolution process.”