Business News Tue, 4 Jun 2019

Rural banks next after microfinance, microcredit cleanup – BoG

The Bank of Ghana (BoG) says work is ongoing to assess the status of rural banks across the country as part of the financial sector clean-up exercise.

According to the BoG, some of the rural banks facing liquidity challenges are being advised to seek strategic partners before action is taken against them.

In an interview with JoyBusiness, Head of Other Financial Services at the Bank of Ghana, Kofi Amoah Awuah noted that it has a different approach with the rural banks due to its mode of operations.

"The rural banks, we cannot talk about it now because they have a different management approach; because it operates in the communities and the people have a level of participation in the running of affairs. But we're working on it and it's a part of the financial system clean up by the Bank of Ghana" he said.

Mr Amoah Awuah added "Rural banks have different models so their public limited liability, their community base and are owned by almost everyone in the community so there is a different process to engage them nonetheless, the work is being done but not at the point of coming out with a plan now so we can't say when but at the right time, we will come out.”

The Bank of Ghana Friday revoked licenses of about 386 microfinance and microcredit companies for being insolvent.

This action follows the decision by the Central Bank to increase the minimum capital for commercial banks forcing some to merge.

He also disclosed that the BoG is working with the ARB Apex bank to ensure sanity in the operations of rural banks in the country.

The finance ministry has also released about GH¢1 billion to help with the cleanup of the microfinance and rural bank sectors.

Source: Myjoyonline.com
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