The Bank of Uganda (BOU) has liquidated and revoked the license of EFC Uganda Limited, a Microfinance Deposit Undertaking Institution (MDI), and ordered the winding of its affairs, citing its failure to resolve its significant under capitalization and poor cooperative governance.

In a statement released on January 19, 2024, the Bank of Uganda Deputy Governor Michael Atingi-Ego noted that, under the powers of BOU sections 72(1) and 12(1)(d) and (g) of the Microfinance Deposit Undertaking Institutions (MDI) Act, 2003, as amended, BOU has effectively placed EFC Uganda Limited under liquidation, revoked its license, and issued orders for the winding up of its affairs.

“This follows the BOU’s determination that the continuation of EFC Uganda Limited operation and activities will be detrimental to the interests of its depositors as a result of its failure to handle under-capitalization and cooperative governance,” reads the statement in part.

Atingi noted that the BOU and the Deposit Protection Fund will inform all the depositors of all the changes and arrangements set in place to enable and ease access to their deposits.

He called upon all creditors to submit their claims to the office of the Director of Financial Stability, BOU, within 30 days of this statement.

“All borrowers of EFC Uganda Limited must continue to serve their loan obligations by making their payments at the BOU offices and branches, and any person processing property of EFC Uganda Limited, should hand it over to the office of the Director Financial Stability,” Atingi said.

Section 69 of the Act says no steps may be taken by any person to enforce any security over property of EFC Uganda Limited, MDI, and no other proceedings of legal process may be commenced or continued against the institution or property.