Ghana’s Finance minister says the cleanup of savings and loans sector will begin before September 2019

Finance Minister of Ghana, Ken Ofori-Atta has disclosed that the planned cleanup of the Savings and Loans sector will take effect before the end of September this year.

Finance Minister of Ghana, Ken Ofori-Atta

According to him, the government is currently working to secure the required funds are provided to aid this exercise by the regulator.

The minister was speaking African Development Bank Annual Meetings in Malabo, Equatorial Guinea.

He noted that the action will be guided by lessons from the previous cleanup.

“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 said.

He added that “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.”

Background

The Bank of Ghana before the end of 2018 set a recapitalization policy in the country where it expected all banks meet a GH¢400 million minimum capital requirement before the beginning of 2019.

Twenty-three universal banks out of thirty-six were left to operate after the implementation of the policy.

Last month, the central bank began its second round of financial sector clean up and closed about 386 microfinance companies that were insolvent and facing serious liquidity issues. 37 licensed savings and loans companies are currently operating the country.

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