The Bank of Ghana has directed all existing Rural Banks to convert into Community Banks by March 31, 2026, as part of a wide-ranging reform of the country’s microfinance sector.
The directive is contained in the Revised Microfinance Sector Framework, which is aimed at strengthening financial stability, improving governance and expanding financial inclusion across the country.
Issued under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Non-Bank Financial Institutions Act, 2008 (Act 774), the new framework replaces the existing Tier 1–4 structure with four categories: Microfinance Banks, Community Banks, Credit Unions and Last-Mile Providers.
As part of the reforms, ARB Apex Bank Limited has been restructured to serve as a central support institution for the sector, providing shared services to Microfinance Banks, Community Banks and licensed Credit Unions.
Under the revised structure, Community Banks will operate as licensed deposit-taking institutions with a mandate to serve both rural and urban communities and integrate them into the national financial system.
Following the March 31 conversion deadline, affected institutions will be required to meet revised capital and regulatory requirements by December 31, 2026. The minimum capital requirement for Community Banks has been set at GH¢5 million, while new urban Community Banks must raise at least GH¢10 million.
The framework also introduces broader community ownership requirements, mandating that at least 30 per cent of shares be held by individuals and organised groups within the bank’s operational area.
To promote inclusive participation, caps have been placed on shareholdings by individuals, related parties, registered groups and corporate entities.
Institutions whose ownership structures exceed the prescribed limits will be required to regularise by the end of 2026.
Banks that do not meet the new capital requirement must notify the Bank of Ghana by June 30, 2026, outlining their chosen recapitalisation approach, and submit progress reports by September 30, 2026.
Options available include standalone recapitalisation, mergers and acquisitions, or the supervised transfer of assets and liabilities to stronger institutions within the same or neighbouring communities to protect depositors and ensure service continuity.
Institutions that fail to comply within the stipulated timelines risk regulatory sanctions, including restrictions on their operations.
The framework also introduces Microfinance Banks, which will focus on serving micro, small and medium-sized enterprises, groups and individuals.
Existing savings and loans companies, finance houses, deposit-taking microfinance firms and micro-credit institutions may transition into Microfinance Banks, subject to meeting minimum capital requirements of GH¢50 million for existing institutions and GH¢100 million for new entrants by December 31, 2026.
Eligible institutions are required to formally notify the central bank of their transition decisions by June 30, 2026, and submit progress updates by September 30, 2026.
Credit Unions with total assets of at least GH¢60 million, maintained continuously over a one-year period, will come under direct Bank of Ghana licensing and supervision from the second quarter of 2026.
Smaller cooperatives and informal operators, including susu collectors, rotating savings groups, village savings associations and micro-credit enterprises, will be classified as Last-Mile Providers and operate under delegated supervision.
A key feature of the reforms is the expanded mandate of ARB Apex Bank Limited, which will now provide services including reserve management, emergency liquidity support, cheque clearing, specie movement, fund management, payment guarantees and shared digital infrastructure such as banking platforms and ATMs.
The Apex Bank will also coordinate inspections, training programmes, policy implementation and temporary support for distressed institutions.
According to the Bank of Ghana, the reforms are intended to address long-standing weaknesses in capitalisation, governance and operational efficiency, while modernising the sector through technology, improved risk management and stronger integration into the national financial system.
All existing institutions are required to complete their transition into the new framework by December 31, 2026. During the transition period, mergers, acquisitions and asset transfers will require prior regulatory approval, and institutions must notify customers at least 30 days before implementing major changes.
The Bank of Ghana has also temporarily suspended the licensing of new institutions, except for Community Banks in priority areas, to ensure a smooth and orderly implementation of the reforms.
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