BoG Reforms: Amenfiman Bank Secures Shareholder Support for Expansion

Shareholders of Amenfiman Rural Bank PLC have granted the board of directors and management authority to carry out a non-renounceable rights issue of shares.

The shareholders also endorsed the Bank’s transition into a community bank, aimed at strengthening its capital base and positioning it for expanded operations under the new Bank of Ghana (BoG) Microfinance Regulatory framework.

The unanimous approval was given at the Bank’s first Extraordinary General Meeting of shareholders, held at Wasa Akropong in the Western Region.

Dr. Alex Asmah, Chief Executive Officer of Amenfiman Rural Bank PLC noted that the rights issue will enable existing shareholders to acquire additional shares at a discounted rate, allowing them to consolidate their holdings while injecting fresh capital into the Bank.

He explained that current shareholders may purchase up to half of their existing shares, while new investors can acquire theirs at a rate to be determined by management and the Board of Directors.

Dr. Asmah added that raising capital comes at a critical juncture as the Bank prepares to transition into a community bank, effective March 31. He described the move as an opportunity to expand services to customers and support local economies.

“With an enhanced mandate, greater capital and stronger governance systems, we can extend our services to areas where clients have consistently requested our presence,” he noted.

The CEO further stated that the upgraded mandate will allow the Bank to increase financing for Micro, Small and Medium Enterprises (MSMEs), invest in technology, and improve customer service systems. He added that stronger capitalisation would also reinforce the Bank’s risk management framework, enabling the prudent extension of higher credit volumes under controlled conditions.

Prof. Lucas Damoah, Board Chairman explained that the approvals were necessary due to upcoming reforms in the microfinance sector.

“Following the microfinance reforms, key decisions must be taken, including a change of name. The regulator intends to convert all rural banks into community banks, which requires shareholder consent,” he said.

Prof. Damoah stressed that enhancing the Bank’s capital adequacy is vital for long-term sustainability.

“In banking, capital adequacy is crucial. Regulators evaluate Banks primarily on capital and liquidity. We want to use this opportunity to strengthen our capital base ahead of the new framework from the Bank of Ghana,” he said.

While details of the new regulatory framework are yet to be fully disclosed, Prof. Damoah noted that one expected improvement is the relaxation of geographical limitations currently restricting rural banks’ operations.

He argued that existing geographic restrictions have disadvantaged rural banks, particularly when clients direct business cash flows through commercial banks that do not support their ventures.

“We should be able to serve our customers wherever they operate. If they trade in China, we should have the capacity to finance their activities and pay their suppliers directly. The Bank that assumes the risk to support the business should not be excluded from the corresponding transactional flows,” Prof. Damoah emphasised.

Shareholders at the meeting expressed support for the proposed rights issue and the Bank’s transition plan, signalling confidence in the management’s strategy to strengthen capital and expand services.

The approvals are expected to position Amenfiman Rural Bank for sustainable growth under the revised microfinance regulatory environment, enhancing its ability to serve both local communities and broader economic activities.