The Bank of Ghana, the central bank of the country, whose responsibility includes regulating microfinance organizations, has chosen not to freeze the number of newly issued microfinance licenses and plans to weigh other alternatives to manage growth in the industry. Raymond Amanfu, the head of the central bank’s Other Financial Institutions Supervision Department, who had announced the licensure freeze in January, recently declared that limiting the number of microfinance licenses would be “encouraging people to go underground again”, which in other words would entail unregistered MFIs operating illegally. Alternatively, the Bank of Ghana is contemplating raising the minimum capital requirement, which the bank boosted to the approximate equivalent of USD 150,000 in 2012. The tightened restrictions, Mr. Amanfu explains, would be not only a matter of compliance but rather “good governance” in the microfinance industry. As a result, the central bank will be examining how MFIs receive and manage funds, in the past as well as the future. The Bank of Ghana has partnered with security agencies to close down 120 unlicensed MFIs and located an additional 40 yet to be shut down in the Ghanaian capital Accra alone.
By Sarah Luo, Research Associate
About Bank of Ghana
Established in 1957, the Bank of Ghana (BoG) has regulatory and supervisory authority over banking and financial institutions in Ghana, including rural and community banks, savings and loan companies, credit unions and non-bank financial institutions. The mandate of BoG is to “maintain stability in the general level of prices, to ensure efficient operations of the banking and credit systems, [and] to support general economic growth.” BoG uses monetary and fiscal policies to achieve its mandate, acts as a banker and financial adviser to the government and performs annual on-site audits of the microfinance institutions within its purview through its Other Financial Institutions Supervisory Department. As of year-end 2012, BoG has total assets of GHS 21.7 billion (USD 9.2 billion).
Sources and Additional Resources:
GhanaWeb: BoG backs down on microfinance freeze
MicroCapital, March 21, 2014. “Bank of Ghana Licenses 394 Microfinance Institutions MFIs donates equipment to trade associations
MicroCapital, January 30, 2014, “Bank of Ghana to Limit Number of Operating Licenses for Microfinance Institutions (MFIs),”
MicroCapital, July 26, 2013: Bank of Ghana to Raise Minimum Capital Requirements to $240 k
MicroCapital Universe Profile: Bank of Ghana (BoG) Wiki
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