Members of the association are owed about GH¢500 million and all efforts to retrieve the monies have proved futile so far, leaving some of its members in financial distress.

The President of the association, Eric Daning, who made the call said the association was surprised to learn that GCB Capital had initiated the disbursement of monies as part of the outstanding locked-up capital to individuals impacted by the financial sector cleanup.

“This would have been great news, were it not for the absence of any reference to RCBs in the repayment agreements”, the association said.

Mr Daning who was speaking at the 23rd annual conference of Rural and Community Banks (RCBs) at Ho in the Volta Region today added that; “This is particularly concerning given that the association has submitted multiple representations regarding the total overdue locked monies, which currently amount to around GH¢500 million.

He said; “The disbursement of these funds can substantially influence the functioning of the 147 RCBs by enhancing our balance sheets.” 

Background

Since the financial sector clean-up undertaken by the government, it has spent over GH¢22 billion on the exercise.

However, many individuals and institutions including RCBs, are still owed various sums of monies running into billions of Ghana cedis.

Bailout funds

Government, through the Ministry of Finance, a couple of months ago, approved the release of an amount of GH¢1.5 billion to continue the bailout programme to affected investors of the failed fund management companies that had their licenses revoked in November 2019.

According to Securities and Exchange Commission (SEC) in a statement, the total amount of GH¢1.5 billion will be released in three tranches commencing with the first tranche of GH¢700 million in August 2024, and GH¢400 million each in October 2024 and December 2024.

This GH¢1.5 billion, the commission said, is in addition to the GH¢4.46 billion previously released to affected investors with examined claims.

The bailout money released so far has been used to pay a total number of 84,202 investor claims of the failed fund management companies out of which 69,445 (representing approx. 82%) investor claims have been fully settled.

The statement said; “This decision, driven by humanitarian considerations, will provide further financial relief to those impacted by the revocation, including investors of Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) and Kron Capital Limited.

This bailout covers investors with examined claims who have accepted the government’s bailout package.”

Repayment agreement

Mr Daning appealed to the Ministry of Finance and the Bank of Ghana. Firstly, to prioritise the inclusion of RCBs in the repayment agreements to ensure that they receive their fair share of the locked-up capital.

“Additionally, I request for a clear timeline for the disbursement of funds to provide much-needed relief to the struggling RCBs. We would appreciate your assistance in releasing locked up funds to aid distressed RCBs and in providing concessional facilities via the ARB Apex Bank for the acquisition of recommended armoured vehicles to improve operating efficiency and security at all RCBs.”

According to him, this will not only benefit the RCBs in their operations but also contribute to the overall stability and growth of the financial sector.