Summary:
- The Bank of Uganda has ordered the liquidation and license revocation of EFC Uganda Limited, a microfinance deposit-taking institution, due to significant undercapitalization and poor corporate governance.
EFC Uganda Limited, a microfinance deposit-taking institution, has been placed under liquidation by the Bank of Uganda (BoU). The central bank has revoked its license and mandated the winding up of its operations in the country. Michael Atingi-Ego, the deputy governor of the Bank of Uganda, cited the decision to close EFC Uganda Limited as a response to the institution’s failure to address significant undercapitalization and poor corporate governance, deeming it detrimental to the interests of depositors.
Atingi-Ego stated that the Bank of Uganda and the Deposit Protection Fund of Uganda would inform depositors about arrangements to access their deposits. Other creditors were urged to submit their claims to the Office of the Director of Financial Stability at the Bank of Uganda within 30 days from the statement’s date.
Borrowers of EFC Uganda Limited were instructed to continue servicing their loan obligations by making payments at Bank of Uganda offices and branches. Additionally, individuals in possession of EFC Uganda Limited’s property were directed to deliver it to the Bank of Uganda, following procedures outlined in Section 69 of the Act. No enforcement of security or legal proceedings against the institution or its property was allowed. Inquiries were advised to be addressed to the Bank of Uganda.
Regarding EFC, it began operations in Uganda in June 2012 as Entrepreneurs Financial Center Limited, later receiving an MDI banking license in November 2014. As of December 2021, the institution had assets worth Shs112.8 billion and shareholders’ equity of Shs12.982 billion. EFCUL’s mission, according to their website, is to provide financial services to MSMEs on a permanent and sustainable basis, contributing to wealth creation and poverty reduction. Shareholders include Développement international Desjardins (DID), AfricInvest Financial Sector Limited (AFS), the Belgian Investment Company for Developing Countries (BIO), and Uganda Gatsby Trust.
