The minimum capital requirement for a Class 1 development bank (wholesale development finance institution) license in the country has been set at Ghs 800 by the Central Bank.
 For a Class 2 development bank (retail development finance institution), the initial minimum capital required is Ghs 600 million. Class 3 development banks (guarantee development finance institution) will require a minimum capital of Ghs 300 to operate in the country.
With regards to Class 4 development finance institution licence, the initial minimum capital required will however depend on the development finance activities that the institution intends to undertake.
In the case of full or majority foreign ownership, the Bank of Ghana said not less than 60 per cent of the required capitalization or contribution shall be brought into Ghana in convertible currency.
Pre-operating conditions
The Central Bank said it shall not issue a licence to an applicant unless it is satisfied that the feasibility report submitted by the applicant is based on sound analysis and prudent, reasonable assumptions as well as the premises for the proposed development financial institution has sufficient title deeds/lease agreements.
Others are structures and processes for governance, including accounting, risk management, and internal control systems and records of the applicant are adequate; the significant shareholders are suitable and the ownership structure of the applicant will not hinder effective supervision, including supervision on a consolidated basis and the paid-up capital of the applicant meets the requirements set out herein and the original sources of capital are acceptable.
Conditions for issuance of licence
The Central Bank said a licence issued under the Development Finance Institutions Act, 2020 (Act 1032), shall be subject to conditions that it may impose.
Also, the Bank of Ghana may, where necessary, and in accordance with the Development Finance Institutions Act, 2020 (Act 1032), restrict the activities in which a development finance institution is permitted to engage.
Development Bank Ghana
A state-owned development bank known as the Development Bank Ghana (DBG) is expected to be launched this year.
Reports indicate that government has been in discussions with four different international financial institutions – KfW, World Bank, AFD and European Investment Bank (EIB) – to help establish the new bank.
It is expected that combined resources from these international institutions will amount to about $500 million which will be used as the seed fund for DBG.
DBG will focus on transforming industries, agriculture, agro-processing, and housing and mortgage sub-sectors of the economy over the medium term.
When operational, DBG will deploy products and instruments such as credit guarantee funds, refinancing of Participating Financial Institutions (PFIs) loans, term loans, business development services and factoring, among others.
