BoG to License Community Banks in Urban Areas to Tackle Financial Exclusion
The Bank of Ghana (BoG) is introducing Urban Community Banking to expand financial services to households and small businesses that remain excluded despite living close to bank branches, Governor Dr Johnson Asiama has announced.
Speaking at the commemoration of 50 Years of Rural Banking and the Conversion to Community Banking on Wednesday, Dr Asiama said the new policy will allow Community Banks to be established wherever they are needed, both rural and urban.
The move, he said, is aimed at addressing a shift in the nature of financial exclusion in Ghana.
“Fifty years ago, we established Rural Banks because many communities were too far from the formal banking system. Today, the challenge is different: a person may live near a bank branch and still be unable to access the financial services they need,” Dr Asiama stated. “Exclusion has not disappeared. It has changed address. Being near a bank is not the same as being served by one.”
The Governor noted that while mobile money, fintech and digital services have widened access, proximity to a bank does not guarantee credit or tailored services. He cited examples of households in cities who can see bank towers from their homes but have never received a loan.
“There are households in this city that can see a bank tower from the front door but have never had a loan from it,” he said. “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 institutions. It should reach the trader, the artisan and the small business in every community.”
Under the new framework, the central bank expects to see Community Banks emerge in urban neighbourhoods that currently lack inclusive lending.
“Which is why you should not be surprised when you meet the East Legon Community Bank, the Cantonments Community Bank, or the Airport Hills Community Bank,” he said. “And before anyone asks, no, East Legon is not short of bank branches. It is short of banks that will lend to the woman who trades there, the artisan who works there, and the young business that has just opened its doors there.”
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