Bank of Ghana implements microfinance sector reforms

The Bank of Ghana is implementing sweeping reforms for the microfinance and specialised deposit-taking institutions (SDIs) sector to rebuild public trust following a 2019 collapse that saw over 400 firms shut down. Speaking at the 16th Annual General Meeting of the Ghana Association of Savings and Loans Companies (GHALSAC), Second Deputy Governor Matilda Asante-Asiedu stated the reforms aim to create institutions capable of weathering economic shocks rather than simply punishing operators.

The regulatory overhaul rests on three primary pillars: strengthening capital bases to absorb losses, raising governance standards for boards and management, and tightening risk management across all SDIs. The central bank plans to publish draft regulations regarding corporate governance, business models, and risk management for industry consultation.

While acknowledging that compliance and operational adjustments will impose financial burdens on surviving firms, the Bank of Ghana maintains that the long-term benefits of stability outweigh immediate costs. Technical committees have been established to manage the transition and address industry concerns regarding implementation timelines and transition arrangements.