The Ghana Micro Finance Institutions Network has told Citi Business News it is engaging with the Bank of Ghana to extend the deadline date for microfinance companies to recapitalize to 2 million cedis.
The central bank as part of measures aimed at sanitizing the microfinance industry has directed all microfinance companies to increase their minimum capital requirement from 1 million cedis to 2 million cedis by end of 2017.
But with just two months to the deadline, the Chairman of the Ghana Micro Finance Institutions Network, Collins Amponsah Mensah tells Citi Business News about 80 percent of its members are struggling to meet the new capital requirement.
“About 80 percent of our member institutions will not be able to meet that deadline and we already engaging Bank of Ghana on that,” he said.
“We are engaging the Bank of Ghana (BoG) to look at either pushing the deadline forward, and see how government can look at microfinance as a complete project and see how they can support these intuitions to attract the needed capital from other sources,” he added.
Mr. Mensah stated that the increase is relevant to strengthen the industry but added that more time will be needed to meet the new requirement.
He explained that microfinance companies are required to generate their fund locally devoid of direct cash injection from financial institutions outside the country.
“We are in support of the two million but the point is how the institutions will raise it as a country, do we have the capacity to attract 2 million cedis to over 600 plus institutions, ? that is the question we need to ask ourselves”.
He spoke to Citi Business News at the sidelines of the AGM of the network.