…increases capital requirement to GH¢100m
By Kingsley Webora TANKEH
The Bank of Ghana (BoG) has unveilled comprehensive reforms for the microfinance sector, imposing new minimum capital requirements and stringent governance standards.
According to the Policy Lead at BoG’s Financial Institutions Policy Department, Dr. Seth Kwame Anani, the reform is aimed at restoring customer trust and curbing fraud.
He made these remarks on the sidelines of the Absa-UPSA Law School Quarterly Banking Roundtable VIII in Accra. The roundtable discussion was on the topic ‘Regulating Microfinance in the Age of Fraud: Restoring Confidence and Growth’.
Dr. Anani revealed that microfinance institutions will be converted to microfinance banks in January 2027.
To this end, he explained that the minimum capital requirement for community banks has been revised to GH¢50million and existing financial institutions hoping to transition into microfinance banks are also expected to raise GH¢50million. However, new entrants into the sector must meet a minimum capital requirement of GH¢100million.
Dr. Anani indicated that all microfinance institutions are expected to meet the revised capital thresholds by December 31, stating this reform will also impact ownership of the institutions.
This means institutions must now decide whether to recapitalise, merge or exit the sector all together as the December deadline approaches.
The reforms, Dr. Anani emphasised, are comprehensive and customer-focused. “The reform is not about shrinking choices,” he said. “It’s about designing the right institutional set that will have the right risk management framework so customers are safe and served very efficiently, with dignity and respect.
“When we have weaker institutions, vulnerabilities increase. Customers don’t get the level of benefit they’re supposed to get. It’s a win-win reform situation,” he added.
The policy lead noted that these reforms aim to promote a cultural change rather than exact mere compliance. According to him, this is critical to stemming fraud which has long plagued the sector.
“We are focusing on strong governance. You want the risk governance structure to have the culture of risk management from the top. When that culture is maintained across the board, then you are building resilience against fraud,” Dr. Anani explained.
Dr. Anani said the central bank has invested in supporting infrastructure, including a collateral registry and sector intelligence platform for real-time cyber threat monitoring. “Beyond the rules, we are actually investing in infrastructure that will support it,” Dr. Anani noted.
CEO-Bayport Savings and Loans Akwasi Aboagye stressed the complex nature of fraud risks these financial institutions face. “A lot of fraud is done by organised crime syndicates. They know what they are doing and they are targetting every institution. Fraud is not just a small problem, it cuts across all parts of the business,” Mr. Aboagye said.
He therefore called for a coordinated industry response through information sharing and fraud intelligence to detect common red flags.
Mr. Aboagye also urged institutions to strengthen internal accountability. “In organisations, we need to increase the level of accountability at the top whereby management ensures zero tolerance for fraud,” he said.
Infrastructure gap
However, former CEO-Dalex Finance Ken Kwamina Thompson has warned that regulatory reforms alone cannot succeed without addressing systemic infrastructure deficits.
“The Bank of Ghana is focusing more on regulations, which is nice. But the infrastructure around it, nobody’s talking about it. What’s the point if you have a system that just says ‘take it to court?’ Because a lot of people think the case is going to be in court for 20 years,” Mr. Thompson explained.
He therefore urged the regulator to push for specialised financial courts. “Why don’t the banks have a special court? Unless we build those guarantees, we’ll be here in five years to talk about it again,” he stated.
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