Bank of Uganda (BoU) has officially liquidated EFC Uganda Limited, revoking its license and ordering the winding up of its affairs, effective January 19, 2024. They have asked everyone who bought any property to return it to the bank and those with loans to continue paying.
Citing severe undercapitalization and poor corporate governance as the main culprits, the central bank exercised its powers under Sections 72 (1) and 12 (1) (d) & (g) of the Microfinance Deposit-taking Institutions (MDI) Act, 2003 as amended. BoU asserts that the continuation of EFC Uganda Limited's activities posed a significant threat to depositors' interests, leaving them with no choice but to intervene.
The announcement, which has already created ripples on social media, came with an official public notice shared on various platforms. The notice boldly declared, 'NEW: LIQUIDATION, REVOCATION OF LICENSE, AND ORDER TO WIND UP EFC UGANDA LIMITED.'
BoU, in collaboration with the Deposit Protection Fund of Uganda, will be reaching out to depositors to communicate the arrangements that will be implemented to facilitate the smooth retrieval of their deposits. Additionally, all creditors are urged to submit their claims within 30 days to the Office of the Director Financial Stability at Bank of Uganda.
THEFT & DRAMA AT EFC BANK:
— Blizz Uganda (@BlizzUganda) April 25, 2023
This lady went to @efcug_care EFC Uganda & got a Loan of 25Million giving up her landtitle as collateral security. She managed to pay back 17M before Lockdown came and when it ended she cleared the remaining 8M only to be told that her.
Read Thread.. pic.twitter.com/En0uW3pSEo
While borrowers of EFC Uganda Limited are expected to continue servicing their loan obligations by making payments at Bank of Uganda offices and branches, the central bank emphasizes that no steps can be taken to enforce any security over the institution's property.
Any individual holding property belonging to EFC Uganda Limited is directed to deliver it to Bank of Uganda, handing it over to the Office of the Director, Financial Stability.
In accordance with Section 69 of the Act, no legal proceedings or execution of legal processes may be initiated against the institution or its property.
For further inquiries, the public is encouraged to address them directly to Bank of Uganda. Deputy Governor Michael Atingi-Ego spearheads this decisive action, highlighting the commitment of the central bank to ensure stability and protect the interests of financial stakeholders.
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…
— Bank of Uganda (@BOU_Official) January 19, 2024
