Microfinance Sector’s Share of Banking Industry Falls to 8% – BoG
The Bank of Ghana (BoG) has revealed that the microfinance sector’s contribution to the country’s overall banking industry has dropped sharply from about 15 per cent in 2017 to 8.0 per cent in 2024.
According to the Central Bank, the decline goes beyond balance sheet figures and signals a broader setback to financial inclusion and economic development, alongside a growing loss of public confidence in the sector.
In its assessment, the Bank of Ghana attributed the downturn to long-standing structural challenges within the microfinance space, including persistent fragmentation, weak capital bases, governance lapses, operational inefficiencies, high and often indiscriminate interest rates, as well as widespread mission drift.
“These weaknesses are particularly concerning given the deposit-taking nature of the business”, the Central Bank alluded.
The Bank stressed that the cumulative effect of these challenges has undermined the sector’s ability to effectively serve its intended purpose, especially in supporting underserved and vulnerable segments of the population.
It noted that urgent and deliberate interventions are required to halt the decline and restore confidence in the microfinance industry.
It, therefore, stated that the time is ripe for proactive and deliberate measures to change course and reverse these trends.
As part of efforts to reform and strengthen the sector, the Bank of Ghana has announced new minimum capital requirements for microfinance institutions. The measures are contained in a new set of regulatory guidelines scheduled to take effect from today, 29th January, 2026.
Under the new framework, microfinance institutions, community banks and credit unions will be required to raise their minimum capital to GH¢50 million by the end of 2026.
The Central Bank believes the revised capital thresholds will enhance resilience, improve governance standards, and position institutions to better protect depositors while supporting sustainable financial inclusion.
