By Rédaction Africa Links 24 with
Published on 2024-01-19 11:54:19
Bank of Uganda has made the decision to close EFC Uganda Limited, a microfinance company, due to its poor financial standing. This action is based on Sections 72 (1) and 12 (1) (d) & (g) of the Microfinance Deposit-taking Institutions (MDI) Act, 2003 as amended. As a result of this decision, EFC’s license has been revoked, and the company has been placed under liquidation with its affairs to be wound up effectively on the specified date.
According to BoU deputy governor, Michael Atingi-Ego, the continuation of EFC’s activities is deemed detrimental to the interests of its depositors due to its significant undercapitalization and poor corporate governance. As a result, the regulator, in collaboration with the Deposit Protection Fund of Uganda, will inform depositors of the arrangements put in place to facilitate access to their deposits. Creditors are also requested to submit their claims to the Office of the Director Financial Stability, Bank of Uganda within 30 days from the date of the statement released by BoU.
It is emphasized that borrowers of EFC with outstanding loans and advances are required to continue servicing their loan obligations by making payments at Bank of Uganda offices and branches. Additionally, individuals or companies holding EFC’s property are urged to hand it over to the Central Bank, with a warning that no action should be taken against the company due to this development.
Last year, parliament recommended a minimum capital requirement for Tier 3 MDI of Shs 5 billion, as opposed to the Shs 10 billion recommended by BOU, in order to ensure a stronger financial industry.
The accompanying image in the original content shows the title “BOU has closed EFC company” and it signifies the decision made by the Bank of Uganda to close EFC Uganda Limited. The content also contained a script for Facebook integration.
Read the original article on The Observer
