BoG has mandated that new microfinance banks maintain a minimum capital of GH¢100 million in order to function.

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The Bank of Ghana (BoG) now requires new Microfinance Banks (MFBs) to have a minimum capital of GH¢100 million to operate in the sector.

The Central Bank stated that the rules aim to improve financial stability and define MFBs as regulated deposit-taking institutions that serve both Micro, Small, and Medium Enterprises (MSMEs) and individual clients.

Existing Savings and Loans, Finance Houses, and Micro Credit Companies must meet capital requirements by December 31, 2026, according to the new laws.

For institutions transitioning to the MFB category, the Bank set a transitional minimum capital requirement of GH¢50 million.

The BoG outlined several compliance options, including stand-alone relicensing for institutions that meet the threshold on their own, consolidation through mergers and acquisitions, asset and liability transfers to qualified entities, and voluntary market exits.

The Bank warned that institutions that failed to adopt one of these options within the timeframe specified would face regulatory action.

The guidelines also introduce shareholding limits to strengthen corporate governance, capping individual ownership at 40 per cent, family or related party stakes at 50 per cent, and allowing corporate bodies to hold up to 100 per cent.

The Bank of Ghana said the measures are expected to improve monetary policy transmission and expand access to formal financial services across the country.

Source: newsthemegh.com