In this post, we bring you all the details on the 23 savings and loans in Ghana whose license was revoked by BoG and hence closed down. This Bank of Ghana savings and loans clean up exercise affected major companies like GN Savings, First Allied, Legacy Capital, Global Access, Women’s World Banking Ghana, Midland, and many other savings and loans companies in the country.
The Controller and Accountant Generals Department has issued a communique following the closure of the 23 savings and loans in Ghana. According to CAGD, about 1,975 government workers who were saving at GN savings and loans, First Allied, and Women’s World Banking savings and loans have had their salaries withheld. The directive given by the Controller and Accountant General’s Department is that the affected workers should provide their particulars for their salaries to be processed.
Full List Of 23 Savings And Loans Companies Closed Down By Bank Of Ghana
Savings And Loans Company Net Worth Capital Adequacy Ratio GN Savings and Loans Ltd. Negative GHS30.70 million. Negative 61.20% First Allied Savings and Loans Co. Ltd. Negative GHS661.84 million. Negative 263.21% Global Access Savings and Loans Company Ltd. Negative GHS58.19 million. Negative 195.06% Legacy Capital Savings and Loans Ltd. Negative GHS19.52 million. Negative 16.96% Midland Savings and Loans Company Ltd. Negative GHS148.92 million. Negative 311.91% Alpha Capital Savings and Loans Ltd. Negative GHS11.51 million. Negative 81.05% CDH Savings and Loans Ltd. Negative GHS171.36 million. Negative 35.90% Commerz Savings and Loans Ltd. Negative GHS40.99 million. Negative 126.15% Express Savings and Loans Company Ltd. Negative GHS119.83 million. Negative 610.52% First African Savings & Loans Company Ltd. Negative GHS22.29 million. Negative 90.15% First Ghana Savings and Loans Co. Ltd. Negative GHS14.08 million. Negative 54.47% FirsTrust Savings and Loans Ltd. Negative GHS175.90 million. Negative 132.96% Women’s World Banking Savings and Loans Co. Ltd. Negative GHS45.56 million. Negative 46.62% Unicredit Savings and Loans Ltd. Negative GHS221.32 million. Negative 97.83% Ideal Finance Limited Negative GHS117.5 million. Negative 32.8%
Complete List Of 23 Savings And Loans Closed By BoG
Here is the full list of all the financial institutions who had their license revoked by Bank of Ghana and because of that, they have been closed down:
1. GN Savings And Loans Limited
Net worth: Negative GHS30.70 million.
Capital adequacy ratio: Negative 61.20%
GN Savings and Loans Company was initially called First National Savings and Loans Company Limited. On 4th September 2014, the company was issued a universal banking license by BoG.
The then GN Savings and Loans Company was renamed GN Bank. During the clean-up exercise conducted by the Bank of Ghana, GN Bank could not meet the minimum capital requirement of 400 million Ghana cedis.
As a result, GN Bank applied to be downgraded from a universal bank t a savings and loans company.
Exactly on the 4th of January 2019, BoG approved the request, and the company was renamed GN Savings and Loans Company Limited.
In addition, Bank of Ghana appointed an advisor to assist GN bank as it transitions into savings and loans with the hope that things will be better this time around.
But what did we see?
GN savings and loans failed to meet most of the financial conditions imposed by BoG.
Instead of getting a minimum of 13% capital adequacy ratio, GN savings recorded negative 61%.
All this while, GN savings claim it was expecting some amount of money from its foreign investors.
Bank of Ghana revealed that GN Bank had serious issues with numerous facilities it extended to other related companies in the Groupe Ndoum network.
These are some of the reasons why the Bank of Ghana revoked the license and closed down GN savings and Loans:
- GN savings had a net worth of negative 30 million Ghana cedis.
- High non-performing loans
- Abysmal capital adequacy ratio of negative 61.02%.
- Checks by BoG shews that GN Bank has transferred huge sums of depositors money to another company owned by Groupe Nduom in the USA called International Business Solutions. What is more? These transfers were done with no documents to support the said transfers.
- According to the Bank of Ghana, GN Savings and Loans has suspended operations in 70 branches, even including the head office. Also, the entire management team has been suspended mainly due to the same liquidity and insolvency crisis.
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2. First Allied Savings And Loans Company Limited
Net worth: Negative GHS661.84 million.
Capital adequacy ratio: Negative 263.21%
Since 1996, First Allied has been operating as a licensed savings and loans company in Ghana.
In March 2018 Bank of Ghana found the company to be insolvent and therefore closed it down in August 2019.
So you could see some of the angry customers in the picture below.
Bank of Ghana revoked the license of First Allied because of the following:
- Failure to meet customers’ deposit withdrawals. This issue was particularly more pronounced at the Adabraka and Kumasi branches.
- Abnormally negative net worth.
- Failure to submit prudential returns to BoG since June 2018 on account of technical issues.
- Non-performing loans way in excess of 88.89% of the company’s total loan portfolio.
- Issues with capital adequacy.
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3. Global Access Savings And Loans Company Limited
Net worth: Negative GHS58.19 million.
Capital adequacy ratio: Negative 195.06%
Global Access came into existence in 1998 but was granted savings and loans license in 2009. Since 2016, the company has been struck by liquidity challenges which led to the revocation of their license in August 2019.
When Thebusinessalert visited their website, this is what we saw:
The reasons for which BoG closed this company include the following:
- Global Access had a net worth of negative 58.19 million Ghana cedis by May 2019.
- Failure to keep proper accounting records.
- Global Access company paid a huge amount of money to its majority shareholder for using its premise.
- The 2017 audited financial statements were not submitted to Bank of Ghana neither was it published.
- The cash reserve ratio requirements were never met since 2016.
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4. Legacy Capital Savings And Loans Limited
Net worth: Negative GHS19.52 million.
Capital adequacy ratio: Negative 16.96%
On 12th August 2016, Legacy Capital was licensed to operate as a savings and loans company in Ghana by the Bank of Ghana. It, however, began actual operation in November 2016.
BoG revoked the license of Legacy Capital on the grounds of insolvency and liquidity issues.
The specific issues that led to the closing down Legacy Capital Savings and Loans include the following:
- Legacy capital recorded a net worth of negative 19.52 million Ghana cedis by May 2019.
- Poor accounting records keeping.
- The capital adequacy ratio was negative 16.96% by May 2019.
- Poor loan underwriting standards.
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5. Midland Savings And Loans Company Limited
Net worth: Negative GHS148.92 million.
Capital adequacy ratio: Negative 311.91%
On 21st October 1996, Midland Savings and Loans Company Limited was given the license to operate. Bank of Ghana’s assessment done in 2017 indicated that Midland was facing serious liquidity challenges.
Some of the reasons why Midland savings and loans’ license was revoked and hence, was closed down were as follows:
- Failure to keep proper accounting records.
- As at the end of May 2019, Midland Savings and Loans had a capital adequacy ratio of negative 311.91%.
- Some investments were impaired because of failure on the part of Midland to conduct due diligence on counterparties.
- Overexposure to related parties in spite of liquidity issues facing Midland Savings and Loans.
- The various branches of Midland were inactive due to inadequate funds.
- Inability to meet the minimum cash reserve ratio.
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6. Adom Savings And Loans Limited
Net worth: Negative GHS9.60 million.
Capital adequacy ratio: Negative 126.23%
It was licensed by Bank of Ghana in August 2016 to operate as a savings and loans company. Adom Savings and Loans started work in November 2016.
The BoG review of the company exposed serious insolvency with capital adequacy ratio hovering over 126%.
Some of the reasons for the revocation of the license include weak earnings, weakness in management oversight, among others.
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7. Alpha Capital Savings And Loans Limited
Net worth: Negative GHS11.51 million.
Capital adequacy ratio: Negative 81.05%
This company (Alpha Capital) begun operations in April 2015 after Bank of Ghana awarding it a savings and loans license in January the same year.
According to BoG, meeting depositors’ withdrawals was a significant challenge for the company.
That resulted in numerous agitations and confrontations by aggrieved customers of Alpha Capital.
What is more, Alpha capital ceased operations as its offices were under lock and key.
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8. CDH Savings And Loans Limited
Net worth: Negative GHS171.36 million.
Capital adequacy ratio: Negative 35.90%
After taking over Ivory Finance Company Ltd, CDH savings and loans commenced operations in 2016.
Three (3) years down the line, CDH recorded a net worth of negative 171.36 million Ghana cedis, which was a real challenge. CDH Savings and Loans was collapsed due to many reasons outlined by the Bank of Ghana.
The company was therefore declared insolvent by the Bank of Ghana and its license revoked.
9. Commerz Savings And Loans Limited
Net worth: Negative GHS40.99 million.
Capital adequacy ratio: Negative 126.15%
The Commerz savings was formerly called Sterling Savings and Loans Limited. It received the license to operate in December 2016. Official work began in February 2017.
Due to many complaints received by BoG from Commerz customers on account of the inability to withdraw deposits, Bank of Ghana advised the board of directors to consider injecting additional capital.
This was, however, unsuccessful.
The savings and loans company was closed down because of the following:
- High non-performing loans.
- Poor net worth.
- Low capital adequacy ratio.
- Poor investment decisions.
- Alarming liquidity challenges.
10. Express Savings And Loans Company Limited
Net worth: Negative GHS119.83 million.
Capital adequacy ratio: Negative 610.52%
As its name suggests, Express savings and loans was expected to deliver express services to its customers. But NO! By May 2019, the company has closed down 14 out of the total 18 branches it had with no approval from BoG.
Some of the reasons why Express Savings and Loans license was revoked include the following:
- Failure to meet minimum capital adequacy ratio as a result of accumulated losses.
- This financial institution had a very bad net worth of GHS 119.83 million.
- Failure to submit audited financial statements since 2016.
11. First African Savings And Loans Company Limited
Net worth: Negative GHS22.29 million.
Capital adequacy ratio: Negative 90.15%
This company first operated in Ghana in 1993 in the business of remittances and money transfers. Later in October 2009, it had the license to operate as a savings and loans company in Ghana.
First African Savings and Loans Limited was found to be having liquidity as well as capital adequacy issues since 2017.
The company was closed down was due to the following:
- Inability to meet withdrawal demands of depositors.
- Impairment in paid-up capital with a net worth of negative 22.29 million Ghana cedis.
- Very bad capital adequacy ration.
- Failure to do due diligence, which led to impairments in some of their investments.
- Deteriorating non-performance loans.
- Violation of minimum cash reserve ratio requirement.
12. First Ghana Savings And Loans Company Limited
Net worth: Negative GHS14.08 million.
Capital adequacy ratio: Negative 54.47%
The company was initially a specialized deposit-taking institution with the license to operate under mortgage financing.
Established in 1956, FGSL was then a Building society with the name “First Ghana Building Society.” In 2006, the Building Society status was changed to a limited liability company.
As one would expect, FGBS was rebranded to be called First Ghana Savings and Loans Co. Ltd.
According to Bank of Ghana, the following were the reasons for their license to be revoked:
- Inability to meet the required minimum cash reserve ratio.
- The net worth of 14.08 million Ghana cedis indicated impairment in the company’s paid-up capital.
- Failure to submit a credible capital restoration plan.
- Very low capital adequacy ratio.
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13. FirsTrust Savings And Loans Limited
Net worth: Negative GHS175.90 million.
Capital adequacy ratio: Negative 132.96%
This company was initially called EZI savings and loans. FirsTrust was licensed to operate in Ghana on 28th January 2015.
The Bank of Ghana conducted reviews from 2015 to 2017, and all indicators proved that the company was in severe distress.
The net worth and the capital adequacy ratio reported by Firstrust Savings and Loans were both negative as at the end of May 2019.
Moreover, FirsTrust had real issues with meeting customer withdrawals. This resulted in serious agitations by aggrieved customers, and many complaints were made to BoG.
What is worse?
The company uses depositors’ money to finance other third-party projects. These non-performing parties have grossly resulted in the significant liquidity challenges facing the company.
BoG also cited poor corporate governance practices and failure to keep accounting records as another reason why FirsTrust Savings and Loans was closed down.
So what did FirsTrus do?
When the company’s attention was drawn to possible revocation of license and hence closure, it decided to merge with Ideal Finance Limited.
Unfortunately, Ideal Finance Ghana Limited was also crippled with severe insolvency and liquidity crisis.
According to BoG, even if the merger was approved the total net worth of the two companies will be negative 164.60 million Ghana cedis, which will be way below standard.
Furthermore, the combined capital adequacy ratio will also translate into negative 47.26%.
This, if allowed, cannot address the current financial crisis facing these two companies.
14. Women’s World Banking Savings And Loans Company Limited
Net worth: Negative GHS45.56 million.
Capital adequacy ratio: Negative 46.62%.
It came into existence on 31st May 1982. Women’s World Banking Ghana Savings and Loans was initially a Non-Governmental Organisation (NGO).
WWBG was given the license to operate as a savings and loans company in Ghana by the Bank of Ghana in October 1996.
The company became insolvent in October 2017.
Some reasons why Women’s World Banking Ghana had its license revoked and therefore closed down include the following:
- The Women’s World Banking (WWBG) had a net worth of negative GH45.56 million by May 2019.
- Failure to meet the minimum required cash reserve ratio.
- Women’s World Banking Savings and Loans failed to implement the on-site recommendations by the Bank of Ghana.
- There were material uncertainties in the 2018 audited financial statements.
15. Unicredit Savings And Loans Limited
Net worth: Negative GHS221.32 million.
Capital adequacy ratio: Negative 97.83%
Previously called Kantamanto Savings and Loans, Unicredit Ghana Limited has been in existence since October 1995.
According to the bank of Ghana, uniCredit was unable to access its funds from another sister company (UniSecurities), which has resulted in gross liquidity issues.
On top of that, uniCredit had too many non-performing loans.
This and many other things resulted in the inability of the company to meet customer’s deposit withdrawals and hence its collapse.
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16. Ideal Finance Limited
Net worth: Negative GHS117.5 million.
Capital adequacy ratio: Negative 32.8%.
Licensed in 2009 by the bank of Ghana as a money lending company under Act 774, Ideal Finance Limited was one of the credible finance houses in Ghana.
Ideal Finance was among the list of savings and loans closed in Ghana partly because it didn’t meet the Bank of Ghana minimum capital requirement.
Some of the issues that led to the collapse of Ideal Finance include the following:
- High non-performing loans.
- Failure to submit returns since 2018.
- Ideal Finance recorded a poor capital adequacy ratio of negative 32.8% as at the end of November 2018.
- Inappropriate classification of some 15 loan accounts leading to extra loss.
- Overexposure to credit customers.
- Ideal Finance had a net worth of negative 117.5 million Ghana cedis as at the end of November 2018.
And like you have seen with other savings and loans whose license was revoked, some of these irregularities run through all of them.
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Other Financial Institutions Whose License Was Revoked And Closed Down By Bank Of Ghana
The list below constitutes other collapsed finance houses in Ghana whose licenses were revoked by BoG:
- IFS Financial Services Ltd. Finance House
- Crest Finance House Ltd. Finance House
- Dream Finance Company Ltd. Finance House
- ASN Financial Services Ltd. Finance House
- Accent Financial Services Ltd. Finance House
- AllTime Finance Ltd. Finance House
- Sterling Financial Services Ltd. Finance House