Rural Banks to Convert into Community Banks by March 31 – Bank of Ghan

All existing Rural Banks in Ghana have been directed to convert into Community Banks by March 31, 2026, as the Bank of Ghana implements a sweeping reform of the country’s microfinance sector aimed at strengthening financial stability, improving governance, and boosting financial inclusion.

The directive is part of the Revised Microfinance Sector Framework, issued under the Banks and Specialized Deposit-Taking Institutions Act, 2016, and the Non-Bank Financial Institutions Act, 2008.

The reform replaces the old Tier 1–4 structure with four new categories: Microfinance Banks, Community Banks, Credit Unions, and Last-Mile Providers, with ARB Apex Bank Limited restructured to serve as a central services hub for the sector.

Community Banks: Key Features

Under the new framework, Community Banks will operate as licensed deposit-taking institutions, integrating both rural and urban communities into the national financial system.

• Former Rural Banks must meet revised minimum capital requirements by December 31, 2026: GH¢5 million for Community Banks and GH¢10 million for new urban Community Banks.

• Community ownership structures will require at least 30% of shares held by individuals and groups within their communities.

  

• Shareholding limits are being introduced to promote inclusive participation, with institutions exceeding thresholds required to regularize by the end of 2026.

Banks falling below the new capital threshold must notify the Bank of Ghana by June 30, 2026, and submit progress updates by September 30, 2026. Options include standalone recapitalization, mergers, or supervised transfer of assets and liabilities, ensuring depositor protection and continuity of services. Institutions that fail to comply risk regulatory sanctions.

Microfinance Banks and Credit Unions

The reform also modernizes other microfinance institutions:

• Microfinance Banks will focus on micro, small, and medium enterprises (MSMEs), groups, and individual clients. Existing savings & loans companies, finance houses, and micro-credit firms can transition into Microfinance Banks if they meet GH¢50 million minimum capital for existing institutions and GH¢100 million for new entrants by December 31, 2026.

• Credit Unions with total assets of at least GH¢60 million over one year will now fall under direct Bank of Ghana licensing and supervision, starting in the second quarter of 2026. Smaller cooperatives and informal operators, including susu collectors, rotating savings groups, and village savings associations, will be classified as Last-Mile Providers operating under delegated supervision.

Role of ARB Apex Bank

A central pillar of the reform is the expanded mandate of ARB Apex Bank Limited, which will now provide shared services across Microfinance Banks, Community Banks, and licensed Credit Unions, including:

• Reserve management and emergency liquidity support

• Cheque clearing, specie movement, fund management, and payment guarantees

• Common digital infrastructure, such as banking platforms and ATMs

ARB Apex Bank will also coordinate inspections, training, policy implementation, and temporary support for distressed institutions.

Objective of the Reform

The Bank of Ghana says the overhaul is designed to:

• Address weaknesses in capitalization, governance, and operational efficiency

• Modernize the sector through technology and stronger risk management

• Promote inclusive ownership and improve the transmission of monetary policy

• Better integrate microfinance institutions into the national financial system

All institutions are required to complete their transition by December 31, 2026. During this period, mergers, acquisitions, and asset transfers will require prior regulatory approval, and institutions must notify customers at least 30 days before major changes.

To ensure an orderly rollout, the Bank of Ghana has temporarily restricted licensing of new institutions, except for Community Banks in priority areas. The Guidelines take immediate effect, with the central bank reserving the right to amend or supplement the framework as needed to safeguard financial stability.