After the collapse of approximately 100 licensed microbanks in Ghana over four years, the country’s central bank, the Bank of Ghana, has announced it will refund deposits of up to GHS 10,000 (USD 2,000) per retail customer affected. Estimates of the total losses exceed GHS 1 billion (USD 200 million), including GHS 522 million (USD 105 million) in claims resulting from the collapse of DKM Diamond Microfinance in 2015. As of December 2018, the government has repaid 80 percent of the DKM Diamond deposits. The total number of customers impacted by all of the failures is in the tens of thousands.
Meanwhile, the Bank of Ghana is in the process of establishing a deposit-insurance scheme that will cover deposits of up to GHS 5,000 (USD 1,000) per retail customer. Among the country’s microfinance institutions (MFIs) and rural banks, the Bank of Ghana estimates the amount of deposits “in jeopardy” is GHS 741 million (USD 150 million) – over half of the total held by these institutions.
By Michelle Fleming, Research Associate
Sources and Additional Resources
Bank of Ghana transcript of press briefing
https://www.bog.gov.gh/privatecontent/MPC_Press_Releases/Transcript%20of%20MPC%20Press%20Briefing%20-%20November%2026%20%202018_Revised.pdf
Ghanaweb press release
https://www.ghanaweb.com/GhanaHomePage/business/Bailout-of-all-microfinance-depositors-underway-705283
MIX profile on microfinance in Ghana
https://www.themix.org/mixmarket/countries-regions/Ghana
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
Similar Posts:
- MICROCAPITAL BRIEF: Bank of Africa, Sanad Fund Deploying $27m for SME Finance in Morocco
- MICROCAPITAL BRIEF: Microfinance Institution 4 de Octubre Borrows $1.5m from Aequitas Fund for Onlending in Ecuador
- MICROCAPITAL BRIEF: Access Bank Botswana Borrows $20m from OPEC Fund for MSMEs, 30% Earmarked for Women
- MICROFINANCE PAPER WRAP-UP: “Determinants of Choice of Credit Source Among Clients of Microfinance Systems in the Upper West Region of Ghana,” by Paul Bata Domanban et al
- MICROCAPITAL BRIEF: Baobab+ Borrows $1.3m from Oikocredit to Boost Household Access to Technology, Solar Energy in Rural Côte d’Ivoire