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🇬🇭 Ghana /Economy & Trade

Bank of Ghana reforms aim to boost confidence, not burden industry

From Ghanaian Times · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • The Bank of Ghana's reforms in the microfinance sector aim to rebuild public confidence and strengthen local participation, not to burden industry players.
  • Key pillars of the reforms include enhancing capital requirements, governance, and risk management to ensure institutions can withstand economic shocks.
  • The reforms are expected to support financial inclusion and Ghana's economic growth, with the microfinance sector serving over 19 million Ghanaians and managing significant assets.

The Bank of Ghana (BoG) is implementing reforms within the Microfinance and Specialised Deposit-taking Institutions Sector (SDIs) with the primary goals of rebuilding public confidence, fostering stronger local participation and ownership, and cultivating more resilient financial institutions. These initiatives are not designed to impose burdensome regulations but to create a more robust and trustworthy financial landscape.

According to Mrs. Matilda Asante-Asiedu, Second Deputy Governor of the BoG, the reforms will concentrate on three core pillars: capital, governance, and risk management. Enhanced capital requirements will ensure that institutions are better equipped to absorb losses during economic downturns and maintain service continuity for their customers. Simultaneously, the BoG is raising standards for the expertise, skills, and ethical conduct expected of boards and management across the sector.

Revised capital requirements will ensure that institutions can absorb the losses of economic shocks and continue to serve their customers through periods of uncertainty.

— Mrs. Matilda Asante-AsieduExplaining the purpose of enhanced capital requirements under the new reforms.

These measures are anticipated to significantly strengthen the sector's capital base and governance frameworks. By establishing a clearer regulatory structure, the BoG aims to support both financial inclusion for a broader population and contribute to Ghana's overall economic growth. The reforms also include developing regulations for corporate governance, risk management, and business models, which will be circulated for industry consultation.

Finance Minister Dr. Cassiel Ato Forson highlighted the microfinance sector's vital role, noting its contribution to financial inclusion, entrepreneurship, and economic development. The sector currently serves over 19 million Ghanaians, supports more than 40,000 direct jobs, manages assets exceeding GH¢50 billion, and disburses loans totaling over GH¢20.5 billion to households and businesses. Ghana's financial inclusion rate has impressively risen to 81 percent, a testament to supportive government policies, regulatory reforms, and digital innovation.

The BoG is raising the bar for the expertise, skills and ethical standards expected of boards and management across the sector.

— Mrs. Matilda Asante-AsieduDetailing the improvements planned for governance standards within financial institutions.
About this summary

Originally published by Ghanaian Times in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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