21st May 2024

Eric Nana Nipah, receiver for collapsed savings and loans and microfinance institutions

Customers of defunct DKM Diamond Microfinance will, latest by next week, receive 100 per cent payment of all their locked-up funds, Daily Statesman sources have revealed.

This follows an agreement reached between the Minister of Finance, Ken Ofori-Atta, and the Governor of the Bank of Ghana, Dr Ernest Addison.

The agreement comes at the back of a request for fund put before the government by the receiver of the collapsed savings and loans and microfinance institutions, Eric Nana Nipah.

According to Daily Statesman sources, the Ministry of Finance, last week, signed a memo to issue an additional bond of GHC1.5b to settle the claims.

The bond, which has been received by the Consolidated Bank Ghana (CBG) Limited, is expected to be bought by the Bank of Ghana for immediate cash to be released for the customers.

Receiver’s letter

A letter addressed to the Governor of BoG, signed by the receiver on July 17, 2020, a copy of which is at the disposal of the Daily Statesman, requested additional fund of approximately GH₵1.6billion to settle depositor claims of the resolved microfinance companies; resolved savings & loans companies, finance house companies, and DKM Diamond Microfinance.

For DKM, the receiver requested an amount GH₵246 million to settle in full all remaining depositors.

The letter said upon the revocation of the operating licence of DKM on 26 February 2016, a Memorandum of Understanding (“MoU”), dated 30 November 2016, was executed between Bank of Ghana (“BoG”) and the Ministry of Finance, which put in place a depositor transfer scheme to pay all valid claims of customers of DKM.

It explained further that the current status of payment to depositors of DKM include total claims received from 90,353 depositors, amounting to GH₵669million. It said, out of the figure, 88,962 of the customers’ claims, amounting to GH₵646million, have been validated, with claims from 1,391customers amounting to GH₵23million rejected.

The receiver stated that, out of the GH₵646 million validated claims, total funds allotted by the BoG to date amounts to GH₵400 million, with less payment made to date, at GH₵329 million, remaining GH₵71 million as balance in the official liquidator’s account at BoG.

This the receiver says he will need GH₵246 to be able to pay all depositors’ claims in full.


President’s commitment

President Akufo-Addo, in delivering the State of the Nation Address in February, said an amount of GH₵5 billion had been set aside to cater for depositors who have their funds locked up in the now defunct microfinance companies.

“I would like to repeat that all depositors of the savings and loans and microfinance institutions, including DKM, which collapsed in 2015 will receive a 100 per cent of their deposits too, once the validation exercise is concluded,” he said.


DKM Microfinance company had its licence suspended by the Bank of Ghana in 2015 after it was adjudged to have engaged in businesses that its licence did not permit.

The company, which was based in Sunyani but had branches predominantly in the northern belt of the country, used customers’ deposits for excessive capital expenditure despite its low paid-up capital of GH¢1 million, making it difficult to meet the depositors’ withdrawals on maturity.

The capital expenditure exceeded the Bank of Ghana’s (BoG) specified threshold of not more than 25 per cent of paid-up capital.

According to the BoG, the microfinance company had invested, as of May 11, 2015, an amount of GH¢16.06 million in property, plant and equipment, excluding the purchase of three ATMs and new banking software.

Consequently, DKM Diamond Microfinance Ltd resorted to operating what BoG has described as “something close to a Ponzi scheme” – a fraudulent and unsustainable high yield investment scheme that uses high interests to entice unwary investors for the purpose of settling maturing yields.


Source: Daily Statesman

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