The Bank of Zambia (BoZ) has started investigating Microfinance Zambia limited for possible insolvency, that is, failure to meet financial obligations as they fall due.
A source has told the Watchdog that the Central Bank is also investigating how both the chairperson and Managing director could have resigned at the same time. Ngosa Chisupa, the board chairperson and M’kwinda Sakala, the CEO resigned a few weeks ago leaving the financial institution unstable.
According to Bank of Zambia sources, once the insolvency is proved, MicroFinance Zambia limited will be possessed by the central bank and later liquated in line with section 127(2) of the Banking and Financial Services Act BFSA.
Last week, the Watchdog revealed that Microfinance Zambia limited is experiencing liquidity challenges and where by depositors are not being paid when they demand their money.
Sources say Micro Finance limited is trying to access the K2.3 billion which the Bank of Zambia says it has approved for microfinance institutions and commercial banks to help businesses remain afloat amid the coronavirus impact to save itself.
The Bank of Zambia has already put under compulsory liquidation Zampost Microfinance Limited (ZMFL) and Pan African Building Society (PABS) which were in similar financial woes which Microfinance Zambia limited is right now. Other Microfins that have collapsed in the recent past are Madison asset company ltd, Focus financial services Zambia and Intermarket bank.