The Bank of Ghana (BoG) is repositioning Ghana’s rural banking sector into community banks as part of efforts to address persistent challenges limiting access to credit for traders, artisans, start-ups and other informal businesses.

Governor of the Bank of Ghana, Dr Johnson Asiama, said the move is aimed at shifting the focus of financial inclusion from merely providing access to banking services to ensuring that community-based financial institutions can provide financing to businesses that remain excluded from formal credit.

Speaking at the commemoration of 50 years of rural banking in Ghana, Dr Asiama said financial exclusion has evolved, with many entrepreneurs and households now living close to bank branches but still unable to secure loans.

“There are households in Accra right here that can see a bank tower from their front door, they can see a bank tower, but they have never had a loan from it. But access is not the same as service and when national policy opens a financing window or eases a pressure or supports a sector, the benefit too often stops at the doors of the largest institution,” he said.

According to the BoG Governor, while mobile money and digital financial services have significantly improved access to financial services, the inability of small businesses to obtain credit remains a major challenge.

He noted that traders, artisans and young entrepreneurs continue to struggle to secure loans, even in urban areas where commercial banks are widely available.

To bridge this gap, the central bank is expanding the mandate of community banks, allowing them to operate in areas where underserved businesses require financing, whether in rural or urban communities.

Dr Asiama said the reform will enable community banks to play a stronger role in supporting the informal sector and addressing gaps in financial intermediation.

“So we are creating the room for community banks to be established wherever, wherever they are needed, rural or urban, which is why you should not be surprised when you meet the East Lagoon Community Bank or the Cantonment Community Bank, or better still, the Airport Hills Community Bank,” he said.

“And before anyone asks, no, East Lagoon is not short of bank branches. It is short of banks, banks that will lend to the woman who trades there, right there, or the artisan, the carpenter who works right there, and of course the young business that has just opened its doors right there,” he added.

The reforms come as Ghana’s rural banking industry marks 50 years since the establishment of Nyakrom Rural Bank, the country’s first community-owned bank.

Over the period, the sector has expanded into a GH¢26 billion industry serving more than eight million customers through 147 licensed rural and community banks operating over 1,000 branches nationwide.

The sector has also become a key source of financing for agriculture, micro, small and medium-sized enterprises (MSMEs), and local economic development.

Digital transformation

Deputy Finance Minister Thomas Ampem Nyarko described the transition to community banking as a strategic response to Ghana’s changing economic needs rather than a mere rebranding exercise.

He said future community banks must become digitally enabled development institutions that provide financing, promote financial literacy and support innovation and entrepreneurship.

According to him, improving macroeconomic stability presents an opportunity to strengthen community banking and channel more funding into productive sectors of the economy.

Government, he said, will continue working with the Bank of Ghana, the Association of Rural Banks, ARB Apex Bank and other industry stakeholders to build resilient and technology-driven community banks.

“The community bank of the future must therefore be more than a lender. It must become a trusted development partner, a digital financial service provider. The future community bank must be a champion of financial literacy. It must be a catalyst for agriculture, a financier of innovation, and a cornerstone of inclusive growth. That is the future we must build together,” he said.

Access to affordable credit remains one of the biggest constraints facing Ghana’s informal economy, which accounts for a significant share of employment and business activity.

The BoG’s community banking reform seeks to move financial inclusion beyond account ownership by expanding access to productive credit for traders, artisans, farmers and micro-enterprises, with the potential to strengthen entrepreneurship, job creation and local economic development.

Are Ghana’s banks winning the old fight while losing the new…

TOR refining Jubilee Oil could ease pressure on the cedi –…