The Bank of Ghana has defended its overhaul of the microfinance and specialised deposit-taking institutions sector, insisting the changes are necessary to rebuild public confidence, strengthen financial institutions and address vulnerabilities despite concerns over implementation timelines and compliance costs.
Speaking at the 16th Annual General Meeting of the Ghana Association of Savings and Loans Companies, Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, said the reforms are not simply about imposing stricter regulation.
“This reform is not merely about introducing stricter regulations. It is about rebuilding public confidence and trust,” she said.
The reforms will focus on three key areas – capital, governance and risk management, and the restructuring of the fragmented sector.
Mrs Asante-Asiedu said revised capital requirements will enable institutions to absorb losses and withstand economic shocks, while higher governance and risk management standards will strengthen oversight.
She also acknowledged concerns raised by industry players over the timelines and transition arrangements.
“Based on our engagement with the association, we took note of concerns about the timelines, transition arrangements and other aspects of the reforms,” she said, adding that technical teams from the Bank and the association are expected to resolve the outstanding issues.
The central bank is also preparing additional regulations, including corporate governance and risk management guidelines, which will be published for industry comment.
But the Second Deputy Governor admitted that the transition will come with financial and operational pressures.
“We recognise that reform is never costless. Compliance costs, operational adjustments and new regulatory expectations are real burdens, and the Bank of Ghana does not take them lightly,” she said.
She, however, maintained that the long-term benefits outweigh the immediate pressures, arguing that properly implemented reforms will strengthen confidence, deepen financial inclusion and support greater local participation.
The Association of Savings and Loans Companies has meanwhile committed to working to bring the sector’s non-performing loans ratio within the target set by the Bank of Ghana.
