The government of Ghana says it is in full support of the decision taken by the bank of Ghana to close down about 23 financial institutions.

The Central bank last Friday revoked the licenses of some 15 savings and loans companies and other 7 financial institutions in a move to clean up the messy financial sector.

Speaking in a News conference in Accra, the Information Minister disclosed that they are in full support of the decision since these companies are insolvent.

He added that it is a move to protect the deposits of of over one million Ghanians who have their deposits in these financial institutions.

"If you have institutions that are insolvent and all they are doing is that they going for emergency liquidity assistance from the central bank to be keeping the institutions running and paying salaries It does not mean the institution is solvent and sustainable."

"This is how to resolve these matters, this how to protect the deposits of over one million Ghanaians"he stressed.

Background

The BoG revoked the licences of the 23 companies because they were highly insolvent.

The BoG also revoked the licences of two non-bank financial institutions, namely Express Funds International Ltd (remittance company) and Ghana Leasing Company Ltd (leasing company).

According to the BoG, the two entities have been insolvent and have been inactive for a number of years.

“This action is pursuant to Section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates the Bank of Ghana to revoke the licence of a non-bank financial institution licensed under that Act if that institution among other things ceases to carry on business,” it said.

Thus, the BoG says it has completed the clean-up of the banking, specialized deposit-taking (SDI), and non-bank financial institutions (NBFI) sectors which began in August 2017.

“This follows the revocation of the licences of nine (9) universal banks, 347 microfinance companies (of which 155 had already ceased operations), 39 micro credit companies/money lenders (10 of which had already ceased operations), 15 savings and loans companies, eight (8) finance house companies, and two (2) non-bank financial institutions that had already ceased operations,” it said.