The Ghanaian government gets $135 million (GH¢700 million) bond to clean up microfinance sector

The Finance Minister, Ken Ofori-Atta who disclosed the information said the fund was a request from the Bank of Ghana to the Ministry of Finance.

According to him, the ministry recently ring-fenced the $135 million (GH¢700 million) in a bond and it was pending the completion of “some logistical arrangements” to allow for the actual clean up exercise to begin.

Although the minister could not tell specifically when the exercise will begin, since the ministry is yet to meet the BoG, he said the sector is prepared to undertake the exercise because they “have the money ready.”

The exercise is a continuation from the banking sector clean-up exercise which ended in January this year.

It is expected that the fund is used to protect customer deposits. The ministry wants to avoid the event that happened under the banking sector before the BoG’s clean-up where customers lost a huge sum of money to some banks which collapsed.

The clean-up will be made in Microfinance Institutions (MFIs), the Savings and Loans Companies (S&LCs) and two sets of financial institutions that are the apex of the Non-Bank Financial Intermediaries (NBFIs) subsector.