MICROCAPITAL BRIEF: Bank of Ghana (BOG) Receives 300 Microfinance License Applications

The Bank of Ghana (BOG) reportedly has received approximately 300 applications “from firms seeking to operate under the second tier of the regulated microfinance institutions.” As reported by MicroCapital at the time, BOG instituted a new licensing regime in September 2011. To obtain licenses, operators are required “to amend their company names to take on the word ‘microfinance’ as a distinctive identification.” Institutions operating under second-tier regulations, which took effect in January 2012, are obliged to hold an initial capital amount of GHS 100,000 (USD 58,600). BOG expects to process the applications and issue licenses by the end of April [1] [2].

Four tiers or types of financial activities are regulated under the provisions of Ghana’s 2004 Banking Act and 2008 non-bank Financial Institutions Act. Tier 1 comprises rural banks, community banks, finance houses and savings and loans institutions. Tier 2 comprises susu (traditional finance) companies and deposit-taking financial non-governmental organizations (FNGOs) and credit unions. Tier 3 includes money lenders and non-deposit taking FNGOs, while Tier 4 covers individual susu collectors and individual money lenders [3].

By Brendan Millan, Research Associate

About Bank of Ghana(BOG): Formed in 1957, BOG is the central bank of Ghana. BOG has regulatory and supervisory authority over financial institutions in Ghana, including rural and community banks, savings and loan companies and credit unions and cooperatives.

Sources and Resources:

[1] Joy: “Central Bank Receives 300 Applications for Microfinance Operations” by Kofi Adu Domfeh. http://business.myjoyonline.com/pages/news/201203/82765.php

[2] Joy: “Over 60 Firms Register to Operate as Microfinance Companies” by Kofi Adu Domfeh. http://business.myjoyonline.com/pages/finance/201108/71334.php

[3] Bank of Ghana: “Operating Rules and Guidelines for Microfinance Institutions.”, http://www.cgap.org/gm/document-1.9.52952/Operating%20Rules%20and%20Guidelines%20for%20Microfinance%20Institutions%20with%20Annex.pdf

MicroCapital.org Article, September 15, 2011, “Bank of Ghana Issues New Licensing Regime to Regulate Microfinance Industry”, https://www.microcapital.org/microcapital-brief-bank-of-ghana-issues-new-licensing-regime-to-regulate-microfinance-industry/

MicroCapital.org Article, June 21, 2011, “Government of Ghana Budgets $10m to Support Ghana Interbank Payment and Settlement System (GHIPSS) to Reach Rural Customers Through ‘E-Z Switch’ biometric Identification System”, https://www.microcapital.org/microcapital-brief-government-of-ghana-budgets-10m-to-support-ghana-interbank-payment-and-settlement-system-ghipss-to-reach-rural-customers-through-%E2%80%9Ce-zwich%E2%80%9D-biometric-identificati/

MicroCapital Universe Profile: Bank of Ghana (BOG), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+of+Ghana+%28BOG%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/