Government to Launch Microfinance Policy by Year-End to Boost Sector Growth
The Government of Ghana is set to roll out a new Microfinance Policy by the end of the year, a move expected to transform the sector and stimulate economic growth.
This was disclosed by Andrew Amerckson, Head of Banking and Non-Banking at the Ministry of Finance, during the launch of a five-year strategic plan by the Ghana Association of Savings and Loans Companies (GHASALC).
Speaking on behalf of the Minister of Finance, Dr. Ato Forson, Amerckson highlighted the significance of the policy, noting that it will serve as a blueprint to streamline and regulate microfinance operations in the country.
“To streamline the operations of the sector, the Ministry of Finance, in collaboration with the Central Bank and other stakeholders, has been working on the introduction of a new microfinance policy to serve as a blueprint to guide microfinance operations in Ghana. We need it to be passed because the risk there is very high,” he stated.
He further indicated that the policy is expected to be implemented through an Executive Instrument (EI) rather than a Legislative Instrument (LI).
Calls for Prioritization in Budget and Regulatory Reclassification
Meanwhile, GHASALC Chief Executive Officer, Tweneboah Koduah Boakye, has urged the government to prioritize the Microfinance Policy in the upcoming national budget, stressing that a well-structured framework will improve access to capital for small and medium-sized enterprises (SMEs).
“We want to see the microfinance policy that was developed with the help of GIZ being adopted by Cabinet and also being translated into an LI. In that policy, we all agreed that the non-banked sector needs to be restructured.”
Boakye also called for a regulatory reclassification of the sector, arguing that its current designation does not accurately reflect its financial strength and market position.
“The current designation does not serve us well. We need the regulator to support the development of the middle tier and recognize that we deserve to be called a bank, given that our balance sheets now exceed those of some banks five or ten years ago.”
Sector Challenges and Growth Targets
The microfinance sector in Ghana serves over 7 million customers and has a cumulative asset base of GHS 9.7 billion. However, it continues to grapple with challenges, including a non-performing loan (NPL) ratio of 15%.
As part of its long-term strategy, GHASALC aims to reduce the NPL ratio to 5%, while expanding financing for micro, small, and medium-sized enterprises (MSMEs) and households to enhance financial inclusion in Ghana.
The rollout of the Microfinance Policy is expected to provide much-needed regulatory clarity, improve sector confidence, and drive economic growth by boosting access to credit for businesses and individuals.
