Uganda’s central bank on Tuesday suspended the operations, Mercantile Credit Bank Limited (MCBL), one of the country’s biggest microfinance institutions, saying the bank was undercapitalised, posing a risk to customer deposits.
The bank is one of five licensed microfinance credit institutions supervised by the central Bank of Uganda.
The Bank of Uganda took action because of MCBL’s “failure to resolve the significant under-capitalisation, the poor governance and the insolvency” BoU’s Deputy Governor Michael Atingi-Ego told a virtual press conference.
He did not give details on the bank’s level of insufficient funding, or the number of customers who will be affected, but said customers would be able to redeem the portion of their deposits that were insured.
In 2017 MCBL said it had assets worth Ush56.8 billion ($15.29 million).
Read: Uncertainty dims Uganda banking sector fortunes
Source: The East African
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