By Steven Enatu
NATIONAL
The Central Bank of Uganda has announced on its official X handle a move to close, revoke license and take over EFC Uganda limited.
EFC Uganda Limited, also known as EFC Uganda, is a microfinance deposit-taking institution in Uganda. It is licensed and supervised by the Uganda Microfinance Regulatory Authority. EFCUL lends primarily to small enterprises.
Now in exercise of its powers under Sections 72 (1) and 12 (1) (d) & (g) of the Microfinance Deposit-taking Institutions (MDI) Act, 2003 as amended, Bank of Uganda (BoU) has effective today, 19th January 2024, placed EFC Uganda Limited under liquidation, revoked its license, and ordered for the winding up of its affairs.
“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” the announcement on X handle reads.
It added that “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,” reads the statement in part.
The Central Bank further advices borrowers of EFC Uganda Limited to continue servicing their loan obligations by making payments at Bank of Uganda offices and branches.
“Any person possessing property of EFC Uganda Limited should deliver it to Bank of Uganda and hand it over to the Office of the Director, Financial Stability,” the statement adds.
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.
EFC Uganda Limited was focused on Micro and Small Entrepreneur (MSE) financing and was established in June 2012 by Development international Desjardins (DID)
EFC Uganda was a deposit taking MICRO Finance Institution and it used to offer individual loan products and current and saving accounts to local micro, small and medium enterprises (MSMEs) and the lower income strata of the Ugandan population.
EFC has two full service branches and five Business Loan Centres at strategic locations in Kampala.
