BoG rolls out sweeping reforms for microfinance sector, sets December 2026 deadline

The Bank of Ghana has issued a comprehensive new guideline to overhaul Ghana’s microfinance sector, introducing a revised institutional framework aimed at strengthening financial inclusion, improving governance, and safeguarding depositors’ funds.

The guideline, issued under Notice No. BG/GOV/SEC/2026/03 and dated January 27, 2026, operationalises a new microfinance sector framework pursuant to the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Non-Bank Financial Institutions Act, 2008 (Act 774). It applies to all Tier 1–4 microfinance institutions operating under the 2011 framework, including ARB Apex Bank Limited, industry associations, and other financial sector stakeholders.

According to the central bank, the reform is designed to address “long-standing structural and operational challenges within the sector to enhance its contribution to financial inclusion and development.” The new framework restructures the sector into four complementary categories: Microfinance Banks (MFBs), Community Banks (CBs), Credit Unions (CUs), and Last-Mile Providers (LMPs). ARB Apex Bank Limited is also to be restructured with an expanded mandate to provide centralised banking and support services across the sector.

Policy objectives

The Bank of Ghana said the reform seeks to resolve regulatory fragmentation by clearly delineating the roles and operational boundaries of institutions, while also addressing weaknesses in capitalisation, governance, and operational efficiency that have “undermined the viability of most institutions and threaten depositors’ funds.”

Other objectives include modernising the sector through technology-driven platforms, strengthening cybersecurity and reporting standards, promoting inclusive ownership, and ensuring that microfinance institutions contribute effectively to the transmission of monetary and financial inclusion policies.

Microfinance Banks and capital thresholds

Under the new framework, Microfinance Banks will be licensed deposit-taking institutions under Act 930, serving Micro, Small and Medium Enterprises (MSMEs), groups, and individual clients. The Bank of Ghana set a minimum capital requirement of GH¢50 million for eligible existing institutions transitioning into MFBs and GH¢100 million for new entrants.

Existing savings and loans companies, finance houses, deposit-taking microfinance companies, and micro-credit companies are eligible to apply for the new MFB licence, provided they meet capital and regulatory requirements by December 31, 2026.

Institutions may transition through standalone compliance, consolidation via mergers or acquisitions, asset and liability transfers, or voluntary exit. Those that fail to act within stipulated timelines “shall be subject to regulatory action,” the notice warned.

Community Banks and rural conversion

Rural and Community Banks will now operate under a unified Community Bank model, with a minimum capital of GH¢5 million, rising to GH¢10 million for new urban community banks. Existing rural banks are required to convert into Community Banks by March 31, 2026, and meet revised capital requirements by the end of 2026.

The framework emphasises broad-based community ownership, requiring at least 30 per cent of shares to be held by individuals and groups within the bank’s community of operation.

Credit Unions and Last-Mile Providers

Credit Unions with assets of GH¢60 million or more for at least one year will be licensed and supervised directly by the Bank of Ghana from the second quarter of 2026. Smaller cooperatives below this threshold will be designated as Last-Mile Providers and operate under delegated supervision by the Credit Unions Association of Ghana.

Last-Mile Providers will include financial NGOs, micro-credit enterprises, cooperative susu collectors, ROSCAs, and VSLAs, focusing on micro-credit and micro-savings mobilisation. A new Handbook on Delegated and Self-Supervision is being developed to guide their operations.

Expanded role for Apex Bank

The mandate of ARB Apex Bank Limited has been extended to cover all categories under the revised framework. The Apex Bank will provide core services such as reserve management, liquidity support, cheque clearing, shared technology platforms, and training, while also supporting institutions facing operational or financial distress.

Transition timeline and compliance

All existing institutions are required to transition into the new framework by December 31, 2026. Institutions pursuing mergers, acquisitions, or asset transfers must obtain prior approval from the Bank of Ghana and submit agreements by September 30, 2026. The central bank also stressed depositor protection, requiring clear customer communication and at least 30 days’ notice before major changes.

“This Notice takes effect from the date of issuance,” the Bank of Ghana stated, adding that it “reserves the right to amend, vary, or supplement this Guideline as it deems necessary to ensure the safety and soundness of the financial system.”