Microfinance firms support BoG reforms, request extended timeline
The Ghana Association of Savings and Loans Companies (GHASALC) has urged the Bank of Ghana (BoG) to review the implementation timelines for its wide-ranging microfinance sector reforms, cautioning that the deadlines may be too tight for operators to meet.
The call follows the central bank’s recent introduction of a comprehensive regulatory framework that increases minimum capital requirements, streamlines industry classifications, and requires full compliance by December 31, 2026.
While GHASALC supports the reforms in principle, it says the transition period requires further consultation. The Chief Executive Officer of the association, Tweneboah Kodua Boakye, in an interview, described the reforms as beneficial for regulation, customer protection, and long-term industry stability, but stressed that the timelines for implementation need reconsideration.
According to him, GHASALC aligns with the BoG’s objective of building a more resilient financial sector and strengthening governance across microfinance and community banking institutions. However, he noted that the pace at which capital requirements are expected to increase poses a significant challenge for existing operators.
“It is good that the regulator is increasing capital requirements, but from where we sit, there are several transitional issues that need to be discussed with the regulator, including the length of time set for achieving these targets. We believe that through engagement, these concerns can be addressed. Overall, we see the reforms as positive for the industry,” he said.
Under the new framework, microfinance companies currently operating with a minimum paid-up capital of GH¢2 million are required to significantly boost their capital within a relatively short timeframe.
Boakye argued that expecting such institutions to raise substantially higher capital within about 11 months or less is overly demanding and could destabilise otherwise viable firms.
He emphasised that while the association supports the direction of the reforms, key transitional matters—particularly timelines and operational adjustments—must be thoroughly discussed with the Bank of Ghana.
GHASALC expressed optimism that continued engagement with the central bank would result in a more practical implementation roadmap that balances financial stability with industry sustainability.
The Bank of Ghana has said the reforms are intended to restore confidence in the sector, protect depositors, and reduce systemic risks. However, industry players are increasingly indicating that while they support the intent, the proposed timelines remain a major concern.
Source: Sekunde FM
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