The Coalition of Affected Savings and Loans Customers (CASLOC) has intensified pressure on the government to release locked-up funds owed to over 500,000 depositors.
These individuals, who lost their investments during the financial sector cleanup, assert that they have waited too long for justice.
Speaking at a press conference in Kumasi on Monday, CASLOC, comprising depositors from 23 collapsed savings and loans companies, 347 microfinance institutions, and 39 microcredit institutions, stated that their patience is thin.
The group alleged that despite government assurances of reimbursement, many of its members remained unpaid since the collapse of the institutions between 2019 and 2020.
During the cleanup exercise, the government announced it had reimbursed over 2 million depositors through the Receiver, with many receiving payments ahead of the 2020 general elections. However, CASLOC members insist that disbursements halted after the polls, leaving over half a million depositors in financial limbo.
The coalition’s secretary, Ezekiel Annor Akagbo, expressed frustration over the government’s claims that all affected depositors have been reimbursed. “What the government says on campaign platforms does not reflect our reality,” he remarked.
The situation is more than a political issue; it is economic. CASLOC emphasized the cascading financial impact of unpaid funds, which they argue stifles economic activity, especially for depositors whose businesses have collapsed due to lack of access to their savings.
“We are calling on the government to instruct the Receiver to disburse any remaining funds,” Mr. Akagbo stated, emphasizing the urgency of the matter.
CASLOC’s members, spanning all 16 regions of Ghana, have set a one-week deadline for the government to act. They warned that failure to do so would lead to mass mobilization against the New Patriotic Party (NPP) in the upcoming December 7 elections.
The coalition stressed the political stakes of the issue, with members vowing to use their votes as a protest against the government’s inaction.
The crisis stems from the Bank of Ghana’s financial sector reforms, which were aimed at addressing insolvency and irregularities within the industry. Between 2017 and 2019, the Bank of Ghana (BoG) undertook a comprehensive financial sector cleanup to address insolvency and regulatory breaches within the industry.
This initiative led to the revocation of licenses for numerous financial institutions, including nine universal banks, 347 microfinance companies, 39 microcredit institutions, and 23 savings and loans companies. The primary objectives were to enhance financial stability, protect depositors, and restore confidence in the banking system.
The cleanup was necessitated by findings from asset quality reviews conducted in 2015 and 2016, which revealed significant challenges related to solvency, liquidity, and asset quality among several banks. These issues included under-provisioning and capital shortfalls, prompting the BoG to intervene decisively.
While the reforms succeeded in creating a more sustainable banking industry, they also had significant repercussions. The closure of these institutions affected millions of depositors, many of whom have faced prolonged delays in accessing their funds.
Despite government assurances and partial reimbursements, over 500,000 depositors reportedly remain unpaid, leading to financial distress and eroding public trust in the financial system.
The financial sector cleanup, though aimed at stabilizing the industry, has had a lasting impact on depositors and the broader economy.
