Finance Ministry releases about GH¢1bn for microfinance, rural bank cleanup

The finance ministry has released almost GH¢1 billion to help with the cleanup of the microfinance and rural bank sectors. 

Sources say the funds were released earlier this month for the project.

Background

Some microfinance companies over the last two years have been hit by some financial challenges resulting in the collapse of their businesses. 

The development resulted in some depositors of these institutions struggling to realize their deposit.

Details of proposed clean up

JoyBusiness understands the Bank of Ghana would supervise the process as the regulator of the sector, however, Consolidated Bank would be making the payments to the customers or affected institutions. 

This should mean that the funds would be lodged at the Consolidated Bank. 

The funds would primarily go to pay off depositors of microfinance companies that have been affected or struggling to retrieve their funds.

The proposed date for the cleanup

It is not clear for now, the actual date the process would kick start, but what JoyBusiness have picked up is that it would happen soon. 

Sources close to the Finance Ministry say they are fast-tracking the process, to soon make funds available for the savings and loans sector, because the cost involved is not that much as compared to the planned cleanup of the microfinance sector.

Institutions likely to be affected

Recent data released by Bank of Ghana showed that 319 microfinance companies are said to be in good standing. 

JoyBusiness cannot independently establish that these funds would only go to those that are in good standing or all the companies.