By CHIMPREPORTS
Bank of Uganda has liquidated and revoked the licence of Entrepreneurs Financial Center (EFC) Uganda, and ordered for its immediate closure over failure to comply with market requirements.
Michael Atingi-Ego, deputy governor Bank of Uganda says EFC has been closed because its activities are detrimental to the interests of its depositors.
“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 undercapitalization and poor corporate governance,” he said in a statement on Friday.
EFC, a microfinance deposit-taking institution (MDI), has been lending primarily to small enterprises.
The institution opened in Uganda in June 2012 as Entrepreneurs Financial Center Limited, with one branch in Ndeeba in the Lubaga Division of Kampala.
In November 2014, EFC was awarded an MDI banking license by the Bank of Uganda.
As of December 2021, EFC owned assets of Shs 112.8 billion, with shareholders’ equity of Shs 12.982 billion.
Atingi-Ego said Bank of Uganda and the Deposit Protection Fund will make arrangements to enable depositors access all their deposits with EFC Uganda.
The deputy governor urged all creditors to submit their claims to the director of financial stability at Bank of Uganda within the next 30 days starting January 19th, the closure date of EFC Uganda.
“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,” he added.
However, all borrowers of EFC Uganda Limited must continue to service their loan obligations by making payments at Bank of Uganda offices and other branches.
Bank of Uganda has also requested all persons possessing property of EFC Uganda Limited to hand it over to the Office of the Director Financial Stability.
The bank further notes that 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.
On 20 October 2016, the central bank took over the management of Crane Bank, suspending its board and acting CEO.
This seizure was related to the bank’s under-capitalization.
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