A financial analyst Dr. Richmond Attuahene has warned more rural and microfinance companies will collapse if the Bank of Ghana carries through with its enforcement of the new minimum capital requirement in February next year.

According to him, many of the rural banks invested with some of the financial institutions that have collapsed because of the high interest they were offering them.

Speaking to Francis Abban on the Morning Starr Tuesday, Dr. Attuahene urged government to protect rural banks because of the key role they play in the rural economy.

“I can’t put a number to it but a lot of them will go down. Giving the rural banks 6 months to raise Ghs2 million is too short a time if you ask me. Personally I think the rural banks are doing exceptionally well and as a matter of fact should be supported greatly”.

The Central bank has warned rural banks that do not meet the new requirement by February 2020 will be punished.

“Further to Bank of Ghana Notice No. BG/GOV/SEC/2015/08 dated 3rd July, 2015, which announced the revision of minimum capital for Rural/Community Banks and Microfinance Institutions to One Million Ghana Cedis (GH?1,000,000) to be complied with by 31st December, 2017, and Two Million Ghana Cedis (GH?2,000,000) to be complied with by 30th June, 2018, respectively, the Bank directs all institutions to meet their respective minimum capital by 28th February, 2020.

“Pursuant to Section 28(1) of the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930) and Section 11 of the Non-Bank Financial Institutions Act, 2008 (Act 774), Rural/Community Banks and Microfinance Institutions which fail to comply with their respective minimum capital by the above date shall be sanctioned.

“Shareholders, Directors, Operators of Rural/Community Banks and Microfinance Institutions are to take note of the above and be guided,” the statement said.