The Bank of Ghana has issued new operating rules and guidelines to regulate microfinance institutions in the country, in pursuance of the provisions of the Non-bank Financial Institutions Act. Categorization of regulated activities under the Non-bank Financial Institutions Act 2008 has increased from a single tier to four tiers, to include susu companies, susu collectors, money lenders and financial NGOs. Under the second tier, susu companies taking deposits and making profits shall hold an initial minimum paid-up capital of not less than Gh¢100,000.00 for one unit office; and the opening of branch(es) shall be subject to higher capital requirements. Credit unions fall under the second tier, but the Bank of Ghana is yet to pass a Legislative Instrument to regulate activities in the sector. The third tier of money lenders and non-deposit taking financial NGOs shall maintain a minimum paid-up capital of Gh¢60,000.00, in addition to a gearing ratio not exceeding eight times their capital. Activities under the fourth tier include the operations of individual susu collectors, susu enterprises, individual money lenders and money lending enterprises. Operators under this tier shall belong to an umbrella body like the Ghana Cooperative Susu Collectors Association (GCSCA) and there shall be no minimum capital requirement for an individual susu collector or money lender. However, each registered member of an umbrella Association shall contribute to an Insurance Fund to be set up by the Association. Meanwhile, regulation under the first tier, including rural and community banks, savings and loans companies and other financial intermediaries already regulated under the Banking Act, remains unchanged. The new licensing requirements are expected to take effect within the next six months. Companies operating the susu business are already confident of better prospects in the micro-finance industry, with the new Central Bank regulation. Players in the sector have maintained the traditional micro-finance industry is the answer to efforts at mobilizing funds from the unbanked population. Chairman of Susu companies in the Ashanti region, Nicolas Osei, tells Luv Biz Report the on-going restructuring is leading microfinance into a new direction. He believes the new interventions should create more jobs and instill public confidence in susu schemes. Story by Kofi Adu Domfeh/Luv Fm/Ghana