Kampala, Uganda | THE INDEPENDENT | The Bank of Uganda and the Deposit Protection Fund (DPF) issued a roadmap for the payment of depositors at microfinance company EFC Uganda, now under liquidation.
According to the plan, and the laws, DPF will pay the protected depositors, or those with deposits not more than 10 million shillings each, starting Monday, while BOU handles the others.
BOU placed EFC Uganda Limited under liquidation, revoked its license, and ordered the winding up of its affairs on January 19, 2024, citing undercapitalization and “governance issues”.
“By Sections 111A and 111C (5) of the Financial Institutions Act 2004 as amended, the Deposit Protection Fund (DPF) will pay the protected deposits. BoU, as a statutory liquidator of EFC Uganda Limited, will pay the unprotected deposits,” a statement jointly issued by BOU and DPF.
DPF will commence payment of the protected deposits, with those claiming up to 100,000 shillings being paid through Mobile Money platforms, starting January 29.
Yusuf Mukiibi, the Director of Finance and Operations at the DPF says that of the 52 billion shillings deposits the EFC had, about 20 clients had deposits amounting to about 50 billion shillings, while the 98 percent of them are those with not more than 10 million shillings.
In effect, according to Mukiibi, the Bank of Uganda will deal with the 2 percent depositors, while DPF pays the 98 percent of the depositors who claim 2 billion.
Of the total depositors, 68 percent had deposits of 100,000 shillings or less each.
Currently, verification of their National Identification Numbers (NIN) and mobile phone numbers is ongoing.
The other depositors, with up to 10 million shillings will be paid effective February 5, 2024, through an Agent Bank that will be communicated before then. BoU will handle depositors who claim more than 10 million shillings and arrangements will be communicated by February 6, according to the statement.
Julia Clare Olima Oyet DPF Chief Executive Officer, expressed satisfaction at the pace at which the settlement of the claimants is being handled compared to the time when banks and financial institutions were closed previously.
Depositors of some banks that were closed as long ago as two decades are yet to be paid, while others may never be mainly because of the incoherence in documentation.
Dr. Oyet says that the fact that EFC claimants will be paid in 10 days from the closure of the bank is a record.
About those clients who had outstanding loans as well as deposits, Oyet said they will be treated differently because they will have to be made to pay back.