BoG oversight of large credit unions long overdue – expert

By Kizito CUDJOE

The decision to bring large credit unions under Bank of Ghana (BoG) supervision is long overdue and could mark a turning point for the sector, according to rural banking expert and Executive Director of Proven Trusted Solutions, Joseph Akossey.

He said this move is a critical step in strengthening governance and expanding financial inclusion across the country.

Under the new microfinance sector reforms, credit unions with assets of GH¢60million and above will – for the first time – be licenced and subject to prudential supervision by the central bank.

The reforms come more than a decade after the Cooperative Credit Union Regulation (LI 225) was passed in 2015, when industry players had expected prompt action from BoG and the Ministry of Finance.

Mr. Akossey believes the current development could professionalise a sector that has grown steadily but remains fragmented and under-penetrated, despite this country pioneering the credit union movement in Africa during 1955.

“This occurred when the first credit union was formed at Jirapa in the Upper East Region. Sad to say, the credit union movement is lagging compared to its counterparts elsewhere – especially in Kenya,” he said.

“Credit union penetration in Ghana is less than five percent, which is too small compared to Kenya where one-third of adults belong to a credit union.”

According to Ghana Cooperative Credit Unions Association (CUA) Limited, the premier umbrella body for credit unions in the country, there are over 400 unions with about 2.5 million members.

Mr. Akossey noted that the sector remains fragmented – dominated by small players with limited impact. “When attention is given through robust supervision, the sector can grow and integrate many people into the national financial ecosystem,” he said.

He added that some large credit unions are already managing significant member-savings, making BoG oversight a timely intervention. For instance, the University of Ghana Credit Union reported a total asset base of GH¢320.93million and savings mobilisation of GH¢136.74million in 2024 while Dunkwa Traders Credit Union recorded an asset base of GH¢230million and deposits of GH¢188million in 2025.

“These are institutions with big assets and member-savings that have potential to do even better,” he said. “The credit union concept is based on the principle of people helping people. Bringing these institutions into the mainstream financial system will strengthen competition in the microfinance sector.”

Mr. Akossey urged BoG to ensure that upcoming corporate governance directives for credit unions consider the cooperative principles which guide these member-owned institutions.

He recommended that large credit unions engage qualified professionals with diverse backgrounds to oversee operations and ensure sector viability.

He also called on the central bank to establish a dedicated unit to supervise credit unions. “Personnel in this unit must understand the credit union concept and principles,” he said.

“Member-owned institutions are different from other financial institutions and must be managed with cooperative values in mind. BoG should also encourage small credit unions to merge, grow their capital and expand membership to achieve economies of scale.”

In addition, Mr. Akossey advised that credit unions must leverage technology to remain competitive. “The financial landscape is evolving. Credit unions must embrace digital solutions to provide seamless services for members,” he said.

He highlighted the importance of marketing and brand visibility for member acquisition. “Most credit unions have low brand awareness and many Ghanaians do not understand their value proposition. Leadership must use both traditional and digital platforms to educate the public and differentiate their brands.”

Mr. Akossey said credit unions should attract qualified professionals who bring innovation and value to the sector. “Qualified personnel matter in financial services. Leadership must be capable of guiding institutions through prudential requirements and reforms,” he added.

He also urged credit unions to establish robust marketing departments to drive membership growth, replacing traditional education committees staffed by non-full-time members. “Strong marketing will help trigger financial inclusion and integrate more Ghanaians into the national financial ecosystem,” he said.

With these reforms, Mr. Akossey believes the sector is poised for transformation. “The Bank of Ghana’s supervision of large credit unions is a welcome development. Done correctly, it will professionalise the sector, enhance governance, protect members’ savings and expand financial inclusion for all Ghanaians,” he remarked.

The post BoG oversight of large credit unions long overdue – expert appeared first on The Business & Financial Times.

Read Full Story