- EFC Uganda Limited’s activities deemed detrimental to the interests of its depositors due to the institution’s failure to resolve its significant under-capitalization and poor corporate governance.
Bank of Uganda has closed EFC Uganda, a microfinance company due to poor financial standing.
According to the Deputy Governor Michael Ating-Ego, the Microfinance Deposit-taking institution does not have sufficient capital to conduct normal business operations and pay creditors.
“This action has been taken because Bank of Uganda has determined that the continuation of EFC Uganda Limited’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant under-capitalization and poor corporate governance.”
“All borrowers of EFC Uganda Limited must continue to service their loan obligations by making payments at Bank of Uganda offices and branches.”
“Any person possessing property of EFC Uganda Limited should deliver it to Bank of Uganda and hand it over to the Office of the Director, Financial Stability”, remarked Atingi-Ego .
The statement further reads, “In exercise of its powers under Sections 72 (1) and 12 (1) (d) & (g) of the Microfinance Deposit-taking Institutions (MDI) Act, 2003 as amended, Bank of Uganda (BoU) has effective today, 19th January 2024, placed EFC Uganda Limited under liquidation, revoked its license, and ordered for the winding up of its affairs.”
“Bank of Uganda and the Deposit Protection Fund of Uganda will inform depositors of the arrangements that will be put in place to enable them to access all of their deposits.”
All other creditors are requested to submit their claims to the Office of the Director Financial Stability, Bank of Uganda within 30 days from the date of this statement.
In accordance with Section 69 of the Act no steps may be taken by any person to enforce any security over the property of EFC Uganda Limited (MDI) and no other proceedings or execution of legal process may be commenced or continued against the institution or its property,according to Bank of Uganda.