MICROCAPITAL BRIEF: Ghana Association of Microfinance Companies (GAMC) Lobbies Central Bank to Reduce Capital Requirement for Rural MFIs

The Ghana Association of Microfinance Companies (GAMC), an “umbrella” organization with 708 members, recently opened talks with the Bank of Ghana (BoG), the nation’s central bank, arguing for the loosening of regulations for rural microfinance institutions (MFIs). BoG recently mandated that all MFIs in the country must hold capital of at least GHS 2 million (USD 450,000) by April 2018. The Executive Secretary of GAMC, Joseph Donkor, reportedly said, “some of the institutions are…located in areas that might not need the 2 million cedis capital [USD 450,000]…if you are not careful some of those institutions will go out of the industry, and it’s not going to help anybody.”

Launched in 2011, GAMC was created to provide its members with “information dissemination services; capacity building; supervisory and monitoring services.”

Established in 1957, 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 cooperatives. However, nonprofit organizations in the country are not regulated by any government agency.

By Aleks Marceau, Research Associate

Sources and additional information:

GhanaWeb News Release:
https://www.ghanaweb.com/GhanaHomePage/business/Reduce-capital-limits-for-MFIs-in-rural-areas-AMFC-573913

GAMC home page:
http://www.gamcapex.org

BoG home page:
https://www.bog.gov.gh

More on BoG from the World Bank:
https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=GH

MicroCapital on BoG:
https://www.microcapital.org/microcapital-brief-bank-ghana-introduces-new-business-regulations-sanctions-improve-governance-microfinance-sector/

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