Banking Authority in Ghana Labels "Digital Lending Services" as a Non-Bank Financial Operation

Bank of Ghana Designates Digital Credit Services, Establishing Regulatory Framework for Digital Lending

The Bank of Ghana (BoG) has made a significant stride in the digital lending sector by designating Digital Credit Services as a Non-Bank Financial Service under the First Schedule of the Non-Bank Financial Institutions Act, 2008 (Act 774). This move paves the way for clearer licensing and consumer-protection rules as digital lending expands.

With this designation, mobile/app-based lending will now fall under an explicit regulatory umbrella, bringing much-needed order and structure to a market that has grown rapidly via mobile money rails and fintech apps. However, it is essential to note that this designation does not grant automatic authorization or licenses to current digital lenders.

The BoG, being the entity that issues the directive establishing licensing requirements for providers of Digital Credit Services in Ghana, will soon issue a Directive outlining the specific requirements for these providers. The intent behind this regulation is twofold: to promote financial inclusion while curbing bad actors in the digital lending market.

The creation of a formal category for Digital Credit Services also serves as a single reference point for compliance and supervision in Ghana's digital lending market. This move aims to ensure that digital lending activities are conducted in a responsible and transparent manner, benefiting both consumers and the overall financial sector.

Despite the rapid growth of the digital lending market in Ghana, providers have operated under varied permissions. This new designation applies to entities already operating under Act 774's First Schedule, ensuring that they fall under the regulatory purview of the BoG.

In conclusion, the BoG's designation of Digital Credit Services as a Non-Bank Financial Service marks a significant step towards establishing a robust regulatory framework for digital lending in Ghana. This move is expected to foster a more responsible and inclusive digital lending market, benefiting both consumers and the financial sector as a whole.

Banking Authority in Ghana Labels "Digital Lending Services" as a Non-Bank Financial Operation