Ghana’s banking regulator has announced a comprehensive restructuring of the country’s microfinance and rural banking landscape, directing all existing Rural Banks to convert into Community Banks by March 31, 2026. The move forms part of a wide-ranging reform programme by the Bank of Ghana (BoG) intended to strengthen financial stability, improve corporate governance standards, and deepen financial inclusion across both rural and urban communities.
The directive is contained in newly released Guidelines on the Revised Microfinance Sector Framework, issued under the authority of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Non-Bank Financial Institutions Act, 2008 (Act 774). The updated framework replaces the former Tier 1–4 classification system with four clearer institutional categories: Microfinance Banks, Community Banks, Credit Unions, and Last-Mile Providers.
In addition, ARB Apex Bank Limited — previously focused mainly on rural banking services — is being repositioned as a central shared-services institution that will provide operational and technical support across the entire microfinance ecosystem.
Community Banks: New Role and Capital Requirements
Under the revised structure, Community Banks will function as licensed deposit-taking institutions mandated to serve defined geographic communities, integrating local populations into the formal financial system. Unlike the traditional rural banking model, the new framework allows Community Banks to operate in both rural and urban settings while maintaining a strong local ownership base.
Following the March 2026 conversion deadline, institutions must also satisfy updated capital and regulatory standards by December 31, 2026. The minimum paid-up capital has been set at GH¢5 million for standard Community Banks and GH¢10 million for newly established urban-focused Community Banks.
Ownership reforms are also central to the policy. At least 30 percent of shareholding must be held by identifiable individuals or organised groups within the bank’s community of operation. Caps have been placed on maximum ownership by single individuals, related parties, corporate bodies, and associations to prevent concentration of control and promote broader community participation. Institutions that currently exceed these limits are required to regularise their share structures before the end of 2026.
Compliance Timelines and Recapitalisation Options
Banks that do not immediately meet the new capital threshold are expected to notify the Bank of Ghana of their chosen recapitalisation or restructuring pathway by June 30, 2026, followed by documented progress updates by September 30, 2026.
Available options include independent capital injection, mergers and acquisitions with stronger institutions, or supervised transfer of assets and liabilities to nearby compliant banks. These measures are designed to protect depositors and ensure uninterrupted financial services. Institutions that fail to comply within the stipulated period risk regulatory sanctions, including operational restrictions or licence withdrawal.
Introduction of Microfinance Banks
Beyond the Community Bank conversion, the framework also establishes Microfinance Banks as a new category of deposit-taking institutions aimed primarily at supporting micro, small and medium-sized enterprises (MSMEs), cooperatives, and individual borrowers. Existing savings and loans companies, finance houses, and certain micro-credit entities may transition into this category provided they meet significantly higher capital requirements — GH¢50 million for existing institutions and GH¢100 million for new entrants — by the end of 2026.
Eligible firms must formally declare their transition intentions by June 30, 2026, and provide progress reports by September 30 of the same year.
Expanded Oversight of Credit Unions and Last-Mile Providers
Credit Unions with asset bases of GH¢60 million or more, maintained continuously over a 12-month period, will come under direct licensing and supervision of the Bank of Ghana beginning in the second quarter of 2026. Smaller cooperatives, susu collectors, rotating savings groups, and village savings associations will be categorised as Last-Mile Providers, operating under delegated oversight rather than full central bank regulation.
ARB Apex Bank’s Strengthened Mandate
A key pillar of the reform is the broadened operational role of ARB Apex Bank Limited, which will now deliver shared services such as liquidity support, cheque clearing, digital banking platforms, ATM infrastructure, payment guarantees, reserve management, and training programmes. The institution will also coordinate inspections, policy implementation, and temporary support for distressed banks, effectively serving as the sector’s central backbone.
Objectives and Implementation Period
The Bank of Ghana states that the overhaul is intended to address long-standing weaknesses in capitalization, risk management, and governance while modernising the sector through technology adoption and improved regulatory alignment. The reforms are also expected to enhance the transmission of monetary policy and expand access to formal banking services nationwide.
All affected institutions must fully transition into the new regulatory structure by December 31, 2026. During the transition period, mergers, acquisitions, and asset transfers will require prior approval from the central bank, and customers must receive at least 30 days’ notice before major structural changes.
To ensure an orderly rollout, the Bank of Ghana has temporarily limited the licensing of new financial institutions, with exceptions granted mainly for Community Banks in underserved or priority regions. The guidelines take immediate effect, with the central bank retaining authority to revise the framework when necessary to safeguard the resilience of Ghana’s financial system.
Source: Africa Publicity
