Savings and Loans sector cleanup to start before September - Finance Minister

Savings and Loans sector cleanup to start before September - Finance Minister
Source: Ghana | JoyBusiness | JAD
Date: 19-06-2019 Time: 07:06:19:am
File-photo: Finance Minister Ken Ofori-Atta

Finance Minister Ken Ofori-Atta has indicated that the planned cleanup of the Savings and Loans sector would happen before September this year.

He said the government is currently working to secure the required funds are provided to aid this exercise by the regulator.

Speaking to JoyBusiness in Malabo, Equatorial Guinea at the just ended African Development Bank Annual Meetings, Mr Ofori-Atta said their action would be guided by lessons from the previous cleanup.

Mr Ofori-Atta said, “It has been a very expensive exercise, in all we’ve spent GH¢12 to GH¢14 billion already and that’s really a stretch on our budget but somehow we’ve been able to do that.”

He added, “I think we are going to spend somewhere around a billion for the MFIs and that’s ongoing, I think it’s gone well so far and then we need to tackle the S&Ls. We are hoping before September; so we are gearing ourselves up to find the resources for that.”

The Bank of Ghana last month began its second round of financial sector clean up to close down microfinance companies that were insolvent and facing serious liquidity issues. 

The regulator plans to the move into the rural banking and savings and loans space especially for those facing liquidity challenges.

Earlier, the Governor of the Bank of Ghana, Dr Ernest Addison said, a few savings and loans firms have shown signs of insolvency and will have to be liquidated just as has happened with the banks.

According to the central bank, there are currently 37 licenced savings and loans companies operating across the country.