Bank of Uganda winds up Mercantile Credit Bank after 30 years of banking

The Bank of Uganda has today June 18th placed Mercantile Credit Bank Limited under liquidation, revoked its license, and made an order for the winding up of its affairs of  the bank’s affairs. 

Bank of Uganda Deputy Governor, Mr Micheal Atingi- Ego noted in a statement action is necessary because the it has been determined that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant undercapitalization, poor corporate governance, and insolvency.  

The Bank of Uganda and the Deposit Protection Fund of Uganda (DPF) are expected toinform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposit(s). The uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as Amended.  

All creditors have been 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. 

All borrowers of Mercantile Credit Bank Limited are directed to continue servicing their loans by making payments at the Bank of Uganda offices and its branches as shall be advised.  

Any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda,” the statement winds up. 

The wind of Mercantile Credit Bank comes six months after the liquidation of EFC Uganda, a microfinance deposit-taking institution (MDI) in Uganda whose license was withdrawn and liquidated by Bank of Uganda on 19 January 2024. 

Mercantile Credit Bank Limited (MCBL) was incorporated in Uganda in December 1981 and only commenced operations in July 1986. It started out as a Merchant Bank facilitating importation and exportation.

In 2004  with the approval of the Financial Institutions Act, the bank was categorised as a Tier II Institution supervised by Bank of Uganda, and in 2012,  the bank entered into a long-term Institutional funding arrangement with the Eastern and Southern African Trade and Development Bank (PTA Bank). 

The bank has been largely providing savings and loans services and was headed by Mr Paul Senyomo who previously worked with Bamburi Cement Group in Kenya in the roles of Project Manager for SAP System enhancements. He also worked as a Financial Controller for Bamburi Cement Limited at the Mombasa Plant where he oversaw Financial Operations, Purchasing, Stores