MICROCAPITAL BRIEF: Bank of Ghana Grants Final License to 90 Financial Institutions

Ninety financial institutions in Ghana recently received their final operating licenses from the Bank of Ghana (BOG), the country’s central bank. 249 microfinance institutions (MFIs) had previously been granted provisional licenses, of which the approved 90 met BOG requirements. Of these 90 companies, 77 are MFIs, 11 are money lending institutions and two are financial non-governmental organisations (NGOs). Mr Philip Cobbinah, Deputy Head of the Banking Supervision Department of Bank of Ghana, reportedly remarked that the licenses come with obligations for the companies, including submission of prudential returns, prior approval by the Bank of Ghana before the introduction of new products to the market, compliance with the limits on deposits and loans. The newly licensed institutions will be constantly monitored to ensure that their operations are in line with regulations to enhance service delivery and safeguard the public interest. He also warned that any of the approved institutions that infringe the bank’s regulations risk having their licenses withdrawn or being fined GHS12,000 (USD 6390).

In 2011, the Bank of Ghana added the regulation of microfinance institutions to its functions as a result of the growing number of MFIs without supervision in that regard. Speaking further, Mr Kwame Sarpong Osei-Bonsu, Assistant Director of Banking Supervision Department, reportedly said the Bank of Ghana was helping the microfinance institutions to enhance their systems and improve corporate governance. Noting that record keeping and controls systems were weak in most Ghanaian MFIs, the Bank of Ghana will offer training to address the capacity needs of MFIs as well as improve off- and on-site supervision to ensure that the institutions operate within the law. 

By Chioma Okwudiafor, Research Associate

About Bank of Ghana (BOG)                                                         The Bank of Ghana is the Central Bank of the nation. BOG has regulatory and supervisory authority in Ghana over banking and financial institutions, including rural and community banks, savings and loan companies, credit unions and cooperatives. The Bank of Ghana conducts annual on-site audits of these institutions; however nonprofit organizations in Ghana are not regulated by any government agency. The bank is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion. As of December 2011, it had total assets of GHC 12.4 billion (USD 6.6 billion).

Sources and Additional Resources:

Ghana News Agency Story: “Bank of Ghana Presents Final Licenses to 90 Microfinance Institutions” http://www.ghananewsagency.org/details/Economics/Bank-of-Ghana-presents-Final-Licenses-to-90-Microfinance-institutions/?ci=3&ai=51716#.UJsZTIdpfjY

MicroCapital Universe Profile: Bank ofGhana https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=Bank+of+Ghana+%28BOG%29

MicroCapital Story:  September 13, 2012, “MICROCAPITAL BRIEF: ProCredit Ghana Sounds Alarm on Multiple Lending, Calls for Tighter Entry Requirements for Microfinance Institutions (MFIs)” https://www.microcapital.org/microcapital-brief-procredit-ghana-sounds-alarm-on-multiple-lending-calls-for-tighter-entry-requirements-for-microfinance-institutions-mfis/

MicroCapital Story: June 2, 2012, “MICROCAPITAL BRIEF: 300 Susu Collectors in Ghana Submit to Regulated Microfinance Regime” https://www.microcapital.org/microcapital-brief-300-susu-collectors-in-ghana-submit-to-regulated-microfinance-regime/

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

 

Similar Posts: