The Bank of Ghana (BoG) has announced a comprehensive reform of the microfinance sector, giving institutions until December 31, 2026 to comply with a new regulatory framework. The reforms mark one of the most significant overhauls in recent years and are aimed at strengthening financial stability, protecting depositors, and restoring confidence in the sector.
Microfinance institutions play a critical role in supporting households, microenterprises, and small businesses. However, weaknesses in governance, capital strength, and risk management have exposed parts of the sector to instability in the past. The new measures are designed to address these vulnerabilities and build a more resilient financial ecosystem.
Higher Capital Requirements for Microfinance Banks
A major component of the reform is the introduction of higher minimum capital thresholds.
- Existing institutions that wish to operate as Microfinance Banks must raise their minimum capital to GH¢50 million.
- New entrants seeking a Microfinance Bank licence will need a higher capital base of GH¢100 million.
According to the Bank of Ghana, these requirements are intended to ensure stronger balance sheets, improve governance standards, and enhance the capacity of institutions that mobilise public funds.
Transition Options for Operators
To support a smooth transition, the BoG has outlined several pathways for institutions that may struggle to meet the new standards. These include:
- Recapitalising independently
- Merging with or being acquired by stronger institutions
- Transferring loan portfolios to more stable entities
- Exiting the market through a regulated winding-down process
Institutions must notify the central bank of their chosen strategy by June 30, 2026, and submit evidence of progress by September 30, 2026. Failure to actively engage in the transition process could lead to regulatory sanctions, including restrictions on business activities.
Reclassification of Rural and Community Banks
The reforms also affect the structure of local banking.
All Rural Banks will be converted into Community Banks by March 31, 2026. Under the new framework:
- Existing Community Banks must maintain a minimum capital of GH¢5 million
- Newly licensed urban Community Banks will be required to meet a higher threshold of GH¢10 million by the end of 2026
The Bank of Ghana states that this restructuring will improve local banking services, strengthen ownership structures, and promote greater accountability within community-based financial institutions.
New Supervisory Rules for Credit Unions
Oversight of credit unions will also be enhanced. Beginning in the second quarter of 2026:
- Credit unions with assets of GH¢60 million or more will come under direct supervision by the Bank of Ghana
- Smaller cooperatives and susu operators will be classified as Last-Mile Providers and monitored through delegated regulatory arrangements
This tiered approach allows the central bank to focus direct supervision on larger, more systemically important institutions, while maintaining oversight of smaller operators through structured supervision channels.
What the Reforms Mean for Customers
The Bank of Ghana has emphasized that the reforms are focused on strengthening the sector, not forcing widespread closures. Customer protection remains a key priority.
During any merger, acquisition, or restructuring process, institutions must provide at least 30 days’ notice before implementing significant changes. This measure is designed to give customers adequate time to make informed decisions about their funds and banking relationships.
Building a Stronger Microfinance Industry
Overall, the new regulatory framework is aimed at creating a more robust, transparent, and well-capitalised microfinance sector. By raising capital requirements, clarifying operational categories, and strengthening supervision, the Bank of Ghana seeks to reduce systemic risks and rebuild trust in the industry.
For households, microenterprises, and small businesses that depend on microfinance services, these reforms are expected to result in more stable institutions, improved governance, and stronger protection for deposits.
As the 2026 deadlines approach, microfinance institutions will need to act decisively to align with the new rules, while customers should stay informed about how changes within their financial institutions may affect them.