Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
Ghana
Country Indicators
Information Last Updated
January 2006
Information Compiled by
Jeremiah Grossman, IRIS Center
Population (Millions)
22.1 [2005]
Population Density (per sq km)
97 [2005]
GNI per capita (US$)
450 [2005]
GNI per capita (PPP US$)
2370 [2005]
Total Unemployment (% of labor force)
8 [2000]
Employment in Agriculture (% of total employment)
55 [2000]
Gross domestic saving (% of GDP)
11 [2005]
% Population under $2/day (PPP)
75 [1999]
Depth of Financial Sector (M2/GDP)
29 [2004]
Exchange rate
1 USD : 9,080 GHC, as of 28 November 2005
Percentage of population with access to banking services
39% of Ghanaians borrowed money in 1998-99, only 3% of whom used formal institutions; 12% saved money using formal and informal institutions (no breakdown available) (as of 1998-99) (Access to Financial Services, Claessens 2005).
Ownership structure of banks (and financial institutions if available)
Commercial banks: Private and state-owned; Rural and Community Banks (RCBs): Community members, with the Bank of Ghana as a preferred shareholder; Savings and Loan Companies: Private. Credit Unions: Individuals and organizations (Gallardo, 2002)
Formal and Semi-Formal Sources of Microfinance
Agricultural development bank, rural and community banks (RCBs), savings and loan companies, credit unions (Steel and Andah, 2003).
Moneylenders, ROSCAs, ASCAs, supplier credit, and susu collectors/susu clubs (These are informal savings mechanisms where clients deposit funds with an agent and then get it back after a prescribed period of time. Some perform like ROSCAs, others are accumulating, where the funds are on-lent to other members. There are also susu companies which are registered businesses whose employees collect savings and promise loans above the amount saved after a minimum period. A few RCBs and S&L’s have offered on-lending funds to susu collectors.
Wholesale Lender(s)
Through the Social Investment Fund (SIF) and the Community Based Rural Development Program (CBRDP), the government provides microfinance-targeted funds to Rural Community Banks (RCBs), Savings and Loan companies (S&Ls), and NGOs. The Ghana Cooperative Credit Unions Association (CUA), an apex institution, operates a Central Finance Facility for shared borrowing among credit unions. In addition, some RCBs are acting as wholesale lenders by developing linkages with NGOs and informal lending organizations, thereby increasing outreach (Andah, 2005; Steel and Andah, 2003).
Definitions of microfinance or microcredit
Loans up to US $120 (984,576 GHC), up to US $1,200 (9,845,760 GHC) with group guarantee. All credit union financial activities are considered microfinance.
NGO microfinance provider formalization or transformation issues
NGOs and other informal money-lending operations can transform into Savings and Loan Companies if they wish to mobilize deposits. However, high minimum capital requirements (approx. US$1.65 million as of 2005) limit such transformation in practice (Andah, 2005)
Ongoing microfinance policy development status
A Credit Union Act is currently in draft form that will fully pass all supervisory role to the Credit Union Association of Ghana.
Safety net availability: insurance, pension, etc.
A Credit Union Act that is currently in draft form would formally delegate supervisory duties to the Ghana Cooperative Credit Union Association (CUA, an apex institution). Likewise, the Association of Rural Banks Apex Bank (ARB Apex Bank) -- which currently performs check clearing and other operations on behalf of its member banks -- is expected to assume supervisory duties in the future(Steel and Andah, 2003); (Andah, 2005).
Area residents. Rural Banks are petitioning the BOG for permission to provide services to the urban poor, but such permission has not been granted (as of May 2005). (Steel and Andah, 2003; Andah, 2005)
High inflation and high interest rates on government securities act as disincentives for RCBs to reach out to smaller, poorer clients. High reserve requirements limit available funds for lending. Directed, subsidized lending threatens loan portfolios and future self-sufficiency. (Steel and Andah, 2003)
174,026 (as of June 30, 2005) (Correspondence with Ghana CUA, Jan. 2006).
US$56 million (508.7 billion GHC) (as of June 30, 2005) (Correspondence with Ghana CUA, Jan. 2006)
US$46.9 million (425.4 billion GHC) (as of June 30, 2005) (Correspondence with Ghana CUA, Jan. 2006)
Varies, but includes middle-class salaried workers and members of rural communities. Average loan size of US$153 indicates a much wealthier average client than RCBs (US$30) (Steel and Andah, 2003)
Low interest rates for loans and deposits have discouraged savings mobilization and limited portfolio growth (Steel and Andah, 2003)
Unit banks licensed to offer financial services in rural areas; RCBs are owned by shareholding members of the rural community (Steel and Andah, 2003)
Bank of Ghana (BOG)/Banking Supervision Department. Association of Rural Banks (ARB) Apex Bank is also licensed to undertake limited supervisory functions for rural banks. The ARB's role is expected to increase to relieve the BOG of some of its supervisory obligations. (Andah, 2005)
Full array of banking services, with the exception of foreign exchange activities (Banking Act, Art.12)
Privately-owned companies that mobilize savings from households and small businesses, lend to micro, small, and medium enterprises, and provide consumer credit (NBFI Business Rules for Deposit-Taking Institutions 2000, Definitions)
NBFI law states that Bank of Ghana (BOG) is the regulator, yet they allow the Ghana Cooperative Credit Union Association (CUA) to serve as a self-regulatory apex body. The CUA regulates credit unions in conjunction with the Department of Cooperatives, but it currently lacks enforcement powers. A forthcoming Credit Union Act is expected to formalize this relationship and increase the powers of the CUA and Department of Cooperatives. (Andah, 2005)
Cooperative ownership of the financial institution; financial services limited to members only (Steel and Andah, 2003)
Non-profit institutions
NGOs
N/A
Non-member, not-for-profit organizations that provide charitable services - which may include financial services and humanitarian services - to poor citizens (Steel and Andah, 2003)
Shareholding restrictions: 30% for individuals, 50% for corporate entities. Corporate entities must submit a feasibility report, past financial statements, and a Board resolution authorizing share purchase. Ownership must be largely community based, but there is no explicit exclusion of foreigners. Shares are sold in local currency (Guidelines for Rural Banking License).
Central Bank must decide whether to grant a banking license within 3 months of receipt of complete information.
Must provide names and qualifications of directors and their businesses. Board must be 7 to 11 people with two or more with finance, accounting, or banking experience. Directors and officers may not be: of unsound mind; insolvent; convicted of fraud, dishonesty, or moral turpitude; former managers of an involuntarily-dissolved institution; directors of another bank; or under 18. Central Bank must approve CEO, and bank must notify Central Bank of any changes in Board of Directors. Central Bank approval required for sale/acquisition of a "significant shareholding" (individuals or companies holding at least 10% of capital or voting rights, or who otherwise can significantly influence the bank's management); change in control; sale, disposal, transfer, merger, or reconstruction of bank. (Banking Act, Art. 34, 36, 38, 40, 90)
Business plan and financial projections for the first five years; areas of intended specialization, if any (Banking Act, Art. 5)
Must submit detailed information regarding financials and background of all directors, officers, and "significant shareholders." (Banking Act, Art. 5, 90)
Bylaws required; must demonstrate satisfactory organizational and infrastructural arrangements; must submit operating and policy manuals. (Banking Act, Art. 5, 8; Guidelines for Rural Banking License, Art.6)
Non-bank Financial Institutions
Savings and Loan Companies
Must provide names and qualifications of directors and their businesses. Board must have at least 5 members, at least two of whom must have experience managing financial institutions or experience with the financial sector. Must provide 30 days' advance notice to Bank of Ghana of changes in Board or CEO. Bank of Ghana (BOG) may disqualify any or all members of NBFI board if deemed to be acting improperly. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 26, 27)
Financial and background information regarding 5 Directors and senior officers, as well as any "significant shareholders" (over 10% of shares or voting, or able to influence management). (Requirements for Non-Bank Financial Institutions Licenses, Art. 4)
Tier I: Equity. Tier II: Subordinated debt; hybrid debt (long-term debt with certain characteristics of capital); unrealized capital gains (Financial Soundness Indicators, 2005)
Performing: 1%.
Other Loans Especially Mentioned (OLEM) (Overdue >30 days): 10%
Substandard (>90 days): 25%
Doubtful (>180 days): 50%
Loss (>540 days): 100% (Steel and Andah, 2003)
Primary reserve requirement (cash and bank balances): 13%. Secondary reserve requirement (investment in gov't bonds and bills): 30% (as of March 2005). Banks must contribute a certain percentage of net profit annually, depending upon the size of the Reserve Fund with respect to the bank's paid-up capital. Less than 50% of paid-up capital: 50% of net profit; 50%-99%: 25% of net profit; 100% or greater: 12.5% of net profit. Banks must also meet prescribed liquidity requirements. (Quarterly Economic Bulletin – April-June 2005; Banking Act, Art. 29, 31)
Tier I: Paid-up capital; free reserves; net surplus. Tier II: General provisions; subordinated debt; hybrid debt (long-term debt with certain characteristics of capital); 45% of book value of Premises Revaluation Reserve (PRR). (NBFI Business Rules for Deposit-Taking Institutions 2000, Annex)
0%: Cash, government bonds, funds in well-rated banks
20%: Money market funds (in Discount Houses)
50%: Home mortgage loans
100%: Other (includes loans secured by movables & group guarantees) (NBFI Business Rules for Deposit-Taking Institutions 2000, Annex)
For micro/small business loans:
Performing: 1%
Overdue 1-29 days: 5%
30-59 days: 20%
60-89 days: 40%
90-119 days: 60%
120-149 days: 80%
150 days or more: 100%. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 21, 22)
Reserve Fund: Annually, 50% of net profit until reserve equals minimum capital, then 15% of net profit annually. Primary liquidity reserve (Cash and bank balances): 10% of total deposit liabilities. Secondary liquidity reserve (investment in gov't bonds and bills: 15%. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 7, 11)
Cooperatives/Credit Unions
Credit Unions
N/A
International World Council of Credit Unions (WOCCU) standards (Steel and Andah, 2003)
International World Council of Credit Unions (WOCCU) standards (Steel and Andah, 2003)
International World Council of Credit Unions (WOCCU) standards (Steel and Andah, 2003)
International World Council of Credit Unions (WOCCU) standards (Steel and Andah, 2003)
Non-profit institutions
NGOs
N/A
N/A
N/A
N/A
N/A
N/A
Risk Management Guidelines
Guidelines & restrictions on financial services
Guidelines & restrictions on operational rules
Guidelines & restrictions on interest rates
Concentration of risk
Connected/insider business
Banks
Rural and Community Banks
Permitted: Public deposit-taking (fixed, term, and time deposits); loans; purchase of local-currency checks and drafts; money transfers; investment in treasury bills; insurance (if commissioned as an agent); checking accounts.
Prohibited: Foreign exchange operations; commercial, industrial, or agricultural activities; purchase or lease of immovable property (except for bank/staff use). ( Banking Act, Art. 12; Andah, 2005; Steel and Andah, 2003))
Rural Banks can only operate in rural districts (Community Banks not subject to this restriction); as a unit bank, cannot branch; need Central Bank permission to close or relocate, or to amend bylaws. (Banking Act, Art. 20, 22, 46)
None. Banks must display their rates within their premises.
Max. loans to individual/entity: 25% (secured) or 10% (unsecured) of bank's net worth. Clearance needed for loans above US$220 (2 million GHC). Max. equity capital investment/aggregate investment in subsidiaries: 15%/25% of bank's net worth per subsidiary, 25%/35% of bank's net worth for all subsidiaries combined. Max. investment in equity of other institutions: 10% of bank's net worth. Large Exposure Reporting Requirement: Must report the details of any aggregate exposure to an individual/entity exceeding 10% of the bank's net worth. (Banking Act, Art. 12, 42, 47, 48, 49, 90; (Steel and Andah, 2003)
Clearance needed for all unsecured loans to RCB directors and their relatives, "significant shareholders" and their relatives, or companies with a financial interest. Secured insider loans cannot exceed 10% of the bank’s net worth. Loans to staff not to exceed 2 years’ salary. Directors must declare nature of interest and recuse themselves from debate over transactions in which they have a direct or indirect interest. (Banking Act, Art. 39, 43, 44)
Non-bank Financial Institutions
Savings and Loan Companies
Permitted: Public deposit-taking; fixed, term, and time deposits; "in-house checking" (intra-institutional check-cashing); loans; purchase of local currency checks and drafts; guarantees, acceptances, and endorsements only with Bank of Ghana(BOG) permission.
Prohibited: Regular checking accounts; gambling, speculation, or any other "socially undesirable” activity. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 4, 5, 32)
BOG can de-license for “undesirable” methods. BOG must be informed of hours of operation.
Max. loans/guarantees to individual/entity: 15% (secured) or 10% (unsecured) of NBFI's net worth. Max. equity investment in any company (including subsidiaries): 15% (per company) or 25% (for all companies combined) of NBFI's net worth. Max. aggregate exposure to subsidiaries: 15% (per subsidiary) or 25% (for all subsidiaries combined) of NBFI's net worth. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 12, 13, 14)
Loans to companies in which a director or officer has an interest as a shareholder or officer: 10% (secured) or 5% (unsecured) of NBFI's net worth. Loans to Directors: Max. 2% of NBFI's net worth if unsecured. Loans to Officers and employees: Max. equivalent to 2 years of salary if unsecured. (NBFI Business Rules for Deposit-Taking Institutions 2000, Rule 15, 16)
Cooperatives/Credit Unions
Credit Unions
Permitted: Savings, loans, and credit insurance to members. Prohibited: Generally, financial services to non-members, except credit unions may accept deposits and borrow from non-members if expressly permitted in their bylaws or regulations; loans for greater than 12-month periods unless permission is granted by licensing authority (Cooperative Societies Decree 1968, Art. 19; Cooperative Societies Regulation 1968, Art. 6, 23, 25; Steel and Andah, 2003)
Branching limited to workplace or community where credit union operates
The Ghana Cooperative Credit Union Association (CUA) regulates interest rates for deposits and loans. (Andah, 2005)
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
Banks
Rural and Community Banks
Annual on-site examinations, with follow-ups and special assignments as necessary; off-site supervision. (Banking Act, Art. 53, 54, 55)
RCBs do not pay supervision costs, which are approx. US$1,100 (10 million GHC) and 6 staff-weeks of labor per audit (as of 2003) (Steel and Andah, 2003)
Weekly: Liquidity reserves; Monthly: Assets & liabilities, credit concentration, sectoral distribution; Quarterly: Current year operating results, capital adequacy, portfolio quality; Annually: Audited statement of accounts, including disclosure of loan loss provisioning. Banks failing to meet the minimum CAR must promptly notify the Central Bank.
Disclosure: Must prominently display most recent financial statements at each bank branch and publish in a national newspaper. (Banking Act, Art. 26, 81)
Annual external audit, on and offsite supervision; no delegation of supervision
S&Ls do not pay supervision costs, which include 3-4 staff-weeks of labor (Steel and Andah, 2003)
Weekly: Liquidity reserves; Monthly: Assets & liabilities; Quarterly: Current year operating results, capital adequacy, regulated exposures, portfolio quality; Semi-annual: Ownership and management reports; Annual: Audited statement of accounts, including disclosure of loan loss provisioning. Banks must provide notice of changes in name, location, director, and/or rules. (Financial Institutions (Non-Banking) Law 1993, Art. 7, 9, 10)
15% tax on goods and services (as of August 2004). Financial services are exempt from VAT (NHIS Levy Begins on August 1,Ghana News Agency 2004; Taxation in Ghana, ISODEC Center for Budget Advocacy 2002)
National Reconstruction Levy (temporary tax in effect since 2001) is being reduced in 2006 to 0-5.5% (depending upon company type), and should be abolished by 2007. (Doing Business in Ghana, Midsnell Group International 2001; Government Reduces Corporate Tax, Ghana News Agency 2005)
MFI-specific
MFI-specific
Cooperatives and NGOs are exempt except when engaging in a trade or business; Rural and Community Banks receive a 10-year tax holiday from start of operations; profits on loans to farmers or leasing companies are taxed at 20%. (Taxation in Ghana, ISODEC Center for Budget Advocacy 2002; Investment Incentives, Benefits and Guarantees, Ghana Investment Promotion Center 2005)
Gift tax waived for gifts for charitable purposes (Doing Business in Ghana, Midsnell Group International 2001)
Other Relevant Business Legislation
Debt Enforcement and Collection
Security interests: Forms accepted
Security interests: Recording
General Applicability
General Applicability
Obtaining a judgment on property pledged as collateral is not difficult, but enforcement is difficult (Steel and Andah, 2003)
Immovable property; movable property in theory, but rarely used in practice because related law is undeveloped (Steel and Andah, 2003)
Creation and enforcement of security interests in immovable property governed by Mortgages Decree 1972, Land Title Registration Law 1986, Conveyance Decree 1973, and Contract Law 1960 (Steel and Andah, 2003)
