Entrepreneurs Financial Center (EFC) Uganda is facing immediate closure as the Bank of Uganda has liquidated the institution and revoked its license, citing non-compliance with market requirements.
Michael Atingi-Ego, deputy governor of the Bank of Uganda, announced the decision, emphasizing that the closure is necessary due to EFC’s failure to meet market standards, particularly in terms of significant undercapitalization and poor corporate governance.
Established in June 2012 as Entrepreneurs Financial Center Limited, EFC, a microfinance deposit-taking institution (MDI), primarily focused on lending to small enterprises. In November 2014, it was granted an MDI banking license by the Bank of Uganda. As of December 2021, EFC’s assets amounted to Shs 112.8 billion, with shareholders’ equity standing at Shs 12.982 billion.
Atingi-Ego assured depositors that the Bank of Uganda, in collaboration with the Deposit Protection Fund will facilitate the retrieval of all deposits with EFC Uganda. Creditors were urged to submit their claims to the director of financial stability at the Bank of Uganda within 30 days starting from the closure date, January 19th.
While borrowers of EFC Uganda Limited are required to continue servicing their loan obligations at Bank of Uganda offices and other branches, the Bank has instructed individuals holding property of EFC Uganda Limited to surrender it to the Office of the Director Financial Stability. Additionally, the Bank emphasized that no enforcement of security over EFC Uganda Limited’s property should take place, and no legal proceedings against the institution or its assets should be initiated or continued.
This closure comes in the wake of the Bank of Uganda’s intervention in October 2016, when it took over the management of Crane Bank due to under-capitalization issues suspending its board and acting CEO.
