Uganda's Central Bank Suspends Mercantile Credit Bank Operations

Uganda's Central Bank suspended Mercantile Credit Bank Limited (MCBL), a major microfinance institution, due to undercapitalisation and poor governance. Deputy Governor Michael Atingi-Ego stated customer deposits are at risk, but insured portions can still be redeemed. In 2017, MCBL had assets worth 56.8 billion Ugandan shillings.

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 central bank 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 56.8 billion Ugandan shillings ($15.29 million). ($1 = 3,715.0000 Ugandan shillings)