The Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has announced sweeping reforms to Ghana's rural banking sector, including its transition to community banking and the introduction of urban community banks, describing the changes as critical to expanding financial inclusion and driving inclusive economic growth.

Speaking at the Rural Banking@50 Celebration and Transition to Community Banking event held at Bank Square in Accra on Thursday, 16 July, Dr Asiama said the reforms would ensure that community-based financial institutions continue to meet the evolving financial needs of Ghanaians while adapting to changing economic realities.

He said the Bank of Ghana has increasingly focused on identifying practical ways of complementing the government's efforts to reduce poverty through greater access to financial services.

"It is established that if we improve access to finance across the populace, that will help lift people out of poverty. That is why the concept of rural banking, bringing banking to the doorstep of ordinary people, remains so relevant," he said.

Honouring the pioneers

Dr Asiama paid tribute to the late Dr Amon Nikoi, the former Governor of the Bank of Ghana who introduced the rural banking concept in 1976, describing his vision as one that transformed financial services in Ghana.

He also honoured the late Mr Emmanuel Asiedu-Mantey, a former Head of Banking Supervision at the Bank of Ghana, whom he described as one of the strongest advocates of community-based banking.

According to the Governor, Mr Asiedu-Mantey was his first supervisor when he joined the central bank nearly three decades ago and remained deeply committed to strengthening the rural banking model throughout his career.

Dr Asiama revealed that after becoming Second Deputy Governor in 2016, he appointed Mr Asiedu-Mantey to chair a committee tasked with reviewing the rural banking framework and recommending reforms to reposition the sector for future growth.

Although the review was not completed before he left office, Dr Asiama said he revisited the committee's recommendations upon his return as Governor and incorporated them into the ongoing reforms of Ghana's microfinance sector.

He invited participants to observe a minute's silence in memory of Mr Asiedu-Mantey, who passed away last year.

"Those who deserve honour must be honoured."

A sector built on community ownership

Reflecting on the sector's history, Dr Asiama recounted the establishment of Ghana's first rural bank at Nyakrom in the Central Region in 1976, describing it as a landmark moment in the country's financial development.

Unlike the expansion of commercial banking through branch networks, he explained, the rural banking concept empowered communities to establish and own their own financial institutions.

"Everything else — the 50 years, the 147 institutions today, the eight million customers — all grew out of that one decision in one town in the Central Region."

He noted that before rural banking was introduced, farmers, traders and small business owners generated considerable economic activity despite having little or no access to formal banking services.

The partnership between the Government of Ghana and the Bank of Ghana, he said, was designed to address this gap by enabling communities to mobilise local savings and extend credit to support local economic development.

Within a year of Nyakrom Rural Bank's establishment, three more rural banks were licensed at Bawjiase, Bisease and Asiakwa, reflecting strong demand for community-owned financial institutions.

Over the decades, rural banks became instrumental in financing agriculture, supporting small businesses, mobilising savings and facilitating payments to cocoa farmers through the Ghana Cocoa Board's Akuafo Cheque Scheme.

Dr Asiama also highlighted the important roles played by the Association of Rural Banks and ARB Apex Bank in strengthening operational support and integrating rural banks into Ghana's wider financial system.

Today, he said, the sector comprises 147 licensed institutions operating nearly 1,000 branches, serving more than eight million customers and managing assets worth approximately GH¢26 billion as of June this year.

"They are not simply a measure of institutional success. They are a verdict on the original idea."

From rural banking to community banking

While celebrating the sector's achievements, Dr Asiama acknowledged that some institutions had struggled with governance failures over the years, resulting in financial losses and declining public confidence.

"When one failed, the loss was not merely recorded in a supervisory return and forgotten. It was recorded in a community, in its savings, in its confidence and in the faith it had placed in an institution carrying its own name."

He said those experiences had informed the latest reforms.

"The idea was right. The framework around it must now be strong enough to deserve it."

The Governor announced that the designation "rural bank" will officially be replaced with "community bank", arguing that the previous name no longer reflects the realities of many communities.

Communities once regarded as rural, he explained, have evolved into thriving commercial and peri-urban centres.

"The word 'rural' tells us where institutions were located. Community better reflects who they exist to serve."

Dr Asiama disclosed that the Bank of Ghana licensed La Community Bank as far back as 1987 and noted that discussions on transitioning the wider sector to community banking had begun in the mid-1990s but were never fully implemented.

He said the sector's 50th anniversary provided the ideal opportunity to complete that long-awaited transition.

Urban community banks to tackle financial exclusion

The Governor described the introduction of urban community banking as the most significant aspect of the reforms.

He explained that while financial exclusion in the past was largely driven by the absence of banking facilities in rural areas, many urban residents today still struggle to access affordable credit despite living close to commercial bank branches.

"A person may live near a bank branch and still be unable to access the financial services they need. Exclusion has not disappeared; it has simply changed its address."

Although mobile money, fintech innovations and digital financial services have expanded access to payments, Dr Asiama said they have not adequately addressed the financing needs of households and small businesses.

He observed that many national financial interventions continue to benefit larger institutions while traders, artisans, start-ups and other small enterprises remain underserved.

To bridge that gap, the Bank of Ghana will permit the establishment of community banks in urban centres where demand exists.

He said future institutions could include names such as East Legon Community Bank, Cantonments Community Bank and Airport Hills Community Bank, stressing that these would be independently licensed, community-owned financial institutions rather than branches of existing commercial banks.

"They will lend to the trader who works there, the artisan who lives there and the young entrepreneur building a business there."

Commitment to inclusive growth

Dr Asiama reaffirmed the Bank of Ghana's commitment to ensuring that community banking remains central to Ghana's financial inclusion agenda.

He said the reforms are intended not only to modernise the sector but also to preserve its founding mission of making financial services accessible to ordinary Ghanaians, regardless of where they live.

"As we celebrate 50 years of community-centred banking, we must ensure that the next generation of institutions remains resilient, innovative and capable of supporting inclusive economic growth."