With just two months left for microfinance institutions to meet the deadline for their new minimum capital requirement of GH¢2 million, the Bank of Ghana has reiterated calls for them to ensure they build the necessary capacity to do so.

The central bank’s recent reforms have seen the recapitalization of commercial banks as well as rural and community banks.

The deadline for meeting the capital requirement was extended from 30th June 2020 to 31st December 2021.

The BoG in August 2019 announced a GH¢2 million new capital requirement for microfinance companies to meet by February 28, 2020.

Over the years the capital requirement had increased from sixty thousand cedis to one hundred thousand cedis, and later three hundred thousand cedis.

After the Bank of Ghana revoked the licences of about 347 microfinance institutions in Ghana, only 137 microfinance companies were left in good standing.

Out of the 137, over 22 have requested for voluntary liquidation, knowing they will not be able to meet the deadline in the next two months.

Business Manager for Other Financial Services at the Bank of Ghana, Dr Philip Opoku Mensah spoke to Citi Business News on the sidelines of the 12th Annual General Meeting of the Micro Credit Association of Ghana.

“We have started engaging all members that have been licensed, not only the microcredit institutions but even the microfinance companies. Now we have three categories, those that are going through voluntary liquidation, they have come forward to do so because they are not able to meet the minimum capital requirement”.

“There are some that are capital impaired by virtue of that though they have GH¢2 million, this money is impaired by losses, and we expect it to be unimpaired. Now there are some that have not met it at all, but we will still look at their financials to ensure that they are complying with other requirements. This is about the second time the deadline has been extended, so we are urging all to try and get new investors for their business or merge so that we can still have our institutions with us going into 2022”.