The Ghana Association of Microfinance Companies (GAMC) has called on the Bank of Ghana (BoG) to reconsider the implementation timeline for its proposed reforms requiring microfinance institutions to meet a minimum capital threshold of GH¢50 million.
Under the proposed regulatory changes, microfinance institutions that wish to operate as Microfinance Banks will be expected to meet the GH¢50 million capital requirement by December 31, 2026. Institutions that fail to comply risk being forced to merge, be acquired, downgrade their licences, or shut down entirely.
Speaking at a stakeholder roundtable on the future of the sector, the Board Chairperson of GAMC, Rebecca Addo, said the industry supports efforts by the central bank to strengthen regulation but believes the current timeline is too tight for many operators.
She stressed that a more gradual approach would be more realistic, suggesting that compliance should be introduced in phases with clear milestones over a longer period.
According to her, rushing the reforms could place significant financial pressure on many microfinance institutions, many of which play a crucial role in providing services to people in underserved and rural communities.
She warned that if a large number of these institutions are unable to meet the new requirements and exit the market, access to financial services could be severely affected, particularly in areas where traditional banks do not operate.
“In many communities, a single microfinance institution is the only available financial service provider because it is not commercially viable for commercial banks to operate there,” she noted, adding that the collapse of such institutions could deepen financial exclusion.
Meanwhile, Principal Consultant at Protage Consult, David Aguda, also expressed concern about certain aspects of the proposed reforms, particularly relating to foreign ownership within the microfinance space.
He argued that while foreign investment is important, unrestricted ownership could lead to significant profit repatriation, which may put pressure on Ghana’s foreign exchange reserves.
He noted that current regulations allow foreign entities to fully own microfinance institutions, a situation he believes should be reviewed to protect the local economy.
Industry stakeholders continue to engage the central bank on the proposed reforms, calling for a balanced regulatory framework that strengthens the sector without undermining its role in supporting small businesses, low-income earners, and financially excluded communities across the country.
