Bank of Uganda has revoked the license of EFC Uganda Limited, a microfinance deposit taking institution because it is undercapitalized.
In a statement from the deputy governor of the central bank, Michael Atingi-Ego, the decision was taken to protect the customers of EFC saying a continuation of its activities was detrimental to the interests of the depositors.
“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,” Atingi-Ego said.
The bank said those who borrowed money from EFC must continue to service their loan obligations by making payments at Bank of Uganda offices and branches.
“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,” the bank noted.
Letters to My Younger Self: Robinah Siima — “Success Is Quieter, But Richer”Under the law, MDIs are supposed to have a minimum capital of Shs 5 billion, The last time EFC published its statements financial statement in 2020, it made a net profit of Shs 2.4 billion against deposits of Shs 40 billion.
But there have been signs of trouble.
Last October EFC down five of its branches, a move that the company said would streamline business processes but which could have been a sign that it was struggling.
