In a significant development, the Bank of Uganda (BOU) and the Deposit Protection Fund (DPF) jointly issued a comprehensive roadmap for the payment of depositors affected by the liquidation of EFC Uganda, a microfinance company.
The plan, in accordance with established laws, outlines a meticulous process to ensure a fair and efficient settlement for affected individuals.
Under the outlined strategy, the DPF is set to initiate payments for protected depositors, those with deposits not exceeding 10 million shillings each, starting on Monday. Simultaneously, BOU will oversee the resolution for depositors with amounts beyond this threshold.
The decision to place EFC Uganda Limited under liquidation, coupled with the revocation of its license, was made on January 19, 2024, citing undercapitalization and governance issues.
According to a joint statement from BOU and DPF, Sections 111A and 111C (5) of the Financial Institutions Act 2004 empower DPF to handle protected deposits, while BOU, as the statutory liquidator, manages the unprotected deposits.
DPF is set to commence payments for protected deposits, with claims up to 100,000 shillings being processed through Mobile Money platforms, starting from January 29.
Yusuf Mukiibi, the Director of Finance and Operations at DPF, revealed that the majority of depositors, constituting 98 percent, have deposits not exceeding 10 million shillings.
In a noteworthy distinction, Mukiibi explained that BOU would handle the 2 percent of depositors with amounts exceeding 10 million shillings, while DPF manages the 98 percent with claims totaling 2 billion shillings.
Verification processes, including National Identification Numbers (NIN) and mobile phone numbers, are currently underway for depositors.
For those with up to 10 million shillings, payments will commence on February 5, 2024, through an Agent Bank, details of which will be communicated beforehand. BOU will handle depositors with claims surpassing 10 million shillings, with arrangements to be communicated by February 6.
Julia Clare Olima Oyet, DPF Chief Executive Officer, expressed satisfaction at the expeditious pace of settling claims, particularly in comparison to historical closures of banks and financial institutions.
Notably, EFC claimants are expected to receive their payments within a record 10 days from the bank’s closure.
Addressing the unique case of clients with outstanding loans and deposits, Dr. Oyet mentioned that they would be treated differently, implying a distinct repayment process for this specific group.
This approach ensures a fair and transparent resolution for all parties involved in the aftermath of EFC Uganda’s liquidation.
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