The Bank of Ghana (BOG) has raised the minimum capital and liquidity requirement for Non-Bank Financial Institutions in the country. A statement signed by BOG Secretary Andrew Boye-Doe on 30th August, 2013 contained the new requirements.
Non-deposit taking microfinance institutions would now require a minimum paid-up capital of GH¢300,000 and deposit-taking ones would require a minimum of GH¢500,000. Existing microfinance companies have to 30th June, 2016 to meet the new requirements.
Below is the full-statement.
MINIMUM CAPITAL REQUIREMENT
All Tier 2 Microfinance Institutions shall comply with the minimum liquidity reserve requirements as follows:
i. Primary Liquidity – 10% of total deposits held in a deposit account with
a class 1 bank.
ii) Secondary Liquidity – 20% of total deposits held in Government of Ghana/Bank of Ghana Securities or Certificates of Deposit held with a class 1 bank.
iii) The amount of a deposit transaction, including the balance on a deposit account at any time shall not exceed 5% of the Institution’s paid-up capital.
iv. No Microfinance Institution shall grant an unsecured loan to any one single obligor which exceeds 5% of its paid-up capital or in the case of a secured facility not more than 10% of the paid up capital. For group loans, the exposure to a single borrower shall not exceed 1% of paid-up capital.
A Microfinance Institution shall not open a branch without prior authorisation by the Bank of Ghana. Unauthorised or unapproved branches shall be subject to immediate closure by the Bank of Ghana, whether or not the required capital has been raised.
i. All licensed and provisionally approved Tier 2 Microfinance Institutions are to raise their minimum paid-up capital to GH¢250,000 by 30th June 2015 and GH¢500,000 by 30th June, 2016.
ii. All licensed and provisionally approved Tier 3 Microfinance Institutions are to raise their minimum paid-up capital to GH¢150,000 by 30th June, 2015 and GH¢300,000 by 30th June, 2016.
Microfinance Institutions that fail to comply with the revised capital requirements shall have their operations scaled down through outright closure of branches by the Bank of Ghana or have their operating licences revoked.
Shareholders, Directors and Operators of Microfinance Institutions should particularly note the above and be guided accordingly.
30th August, 2013