The Bank of Ghana (BoG) has said it will strengthen the capacity of the ARB Apex Bank to enable it provide support for rural and community banks who are facing liquidity challenges.
Speaking at the Monetary Policy Committee (SDI) meeting on Friday May 15, the Governor of the Bank of Ghana, Dr Ernest Addison, said the Specialized Deposits Institutions (SDIs) sector has played a key role in extending access to financial services to small households and businesses.
“Such customers are at high risk of being disproportionately impacted by the pandemic, either because they have lost their livelihoods in the informal/micro and small business sector or have lost their jobs.
“At the same time, SDIs (Microfinance and Rural Banks) are much smaller in size and balance sheet, compared to the banks, and are themselves being impacted by the pandemic.
“To further provide economic relief to households and businesses, and to increase credit to the key sectors of the economy, BOG announces the following additional measures:
“Activate section 46A of the Bank of Ghana Act 2002 (Act 612) as amended, to provide liquidity support to savings and loans and finance house companies facing temporary liquidity challenges.
“Eligibility for this facility and the terms and conditions upon which it will be granted will be based strictly on the provisions of section 46A and BOG’s updated liquidity support policy framework.
“Strengthen the capacity of the ARB Apex Bank to provide liquidity support for rural and community banks facing temporary liquidity challenges in line with a framework to be agreed.
“Microfinance companies who meet eligibility criteria agreed will also qualify for this support from ARB Apex Bank.”