Can Non-Interest Banking enhance financial inclusion?

By National Banking College

Financial inclusion has become a central pillar of economic development across emerging economies. Access to reliable financial services allows individuals to save securely, manage financial risks, invest in businesses and participate more actively in the formal economy.

Over the past decade, Ghana has made significant progress in expanding access to financial services, largely driven by the rapid growth of digital finance. However, the challenge facing policymakers today is not only how to expand access but also how to deepen meaningful financial participation.

Ghana’s financial landscape has been transformed by mobile money and digital financial services. According to the Payment Systems Oversight Annual Report, Ghana recorded over 66 million registered mobile money accounts with more than 24 million active users by 2024, demonstrating the widespread adoption of digital financial services (Bank of Ghana, 2024). In addition, the total value of mobile money transactions exceeded GH¢1.9 trillion in 2024, highlighting the central role digital payments now play in Ghana’s financial system (Bank of Ghana, 2024).

These developments have contributed significantly to improvements in financial inclusion. Nevertheless, access to financial services does not automatically translate into access to productive financing. Many small businesses, farmers and entrepreneurs still face significant barriers in obtaining credit from formal financial institutions due to high lending rates, collateral requirements and limited banking infrastructure in rural areas.

Within this context, non-interest banking, often associated with Islamic finance, has gained attention as a potential complementary approach to expanding financial inclusion and broadening financial sector participation.

Financial Inclusion Trends in Ghana (2014–2024)

Over the past decade, Ghana has made notable progress in expanding financial access through a combination of regulatory reforms, digital financial innovation and increased mobile connectivity.

Mobile money services have played a particularly transformative role by allowing individuals to send, receive and store money using mobile phones without the need for traditional bank accounts.

The expansion of mobile money agents across the country has significantly reduced geographical barriers to financial access. As a result, millions of previously unbanked individuals now participate in the financial ecosystem.

Table 1: Financial Inclusion Trends in Ghana

Year	Adults with Financial Accounts (%)	Mobile Money Accounts (Registered)	Key Drivers
2014	41%	13 million	Early mobile money adoption
2017	58%	23 million	Expansion of mobile money agents
2021	68%	38 million	Digital financial services growth
2023	80%	44 million	Increased digital payments and fintech innovation
2024	Over 80%	66 million registered (24 million active)	Mobile money dominance in payments

Sources: World Bank (2022); Bank of Ghana (2024).

Despite these improvements, an important gap remains between financial access and financial depth. While many individuals now have financial accounts, fewer have access to productive financial services such as business financing, investment capital or structured savings products.

Understanding Non-Interest Banking

Non-interest banking refers to a financial system that operates without charging or paying interest. Instead of conventional debt-based lending, financial institutions provide financing through arrangements based on profit-sharing, asset-backed financing and partnership agreements.

Common financing structures include:

• Murabaha (cost-plus financing): a financial institution purchases an asset and sells it to a client at an agreed markup payable over time.
• Musharakah (joint partnership): both the bank and the entrepreneur contribute capital to a business venture and share profits according to an agreed ratio.
• Mudarabah (investment partnership): one party provides capital while the other manages the business.
• Ijara (leasing): the bank purchases assets and leases them to clients for productive use.

These structures link financial transactions more closely to real economic activity and risk sharing, rather than relying purely on interest-based lending.

Globally, non-interest finance has grown rapidly over the past two decades. The global Islamic finance industry now exceeds US$3.5 trillion in total assets, reflecting strong growth across banking, capital markets and insurance sectors (Islamic Financial Services Board, 2024).

Ghana’s Demographic Context

The potential relevance of non-interest banking in Ghana is partly influenced by the country’s demographic composition. According to the 2021 Population and Housing Census, Muslims constitute approximately 19.9 percent of Ghana’s population, representing more than 6 million people (Ghana Statistical Service, 2021).

The distribution of this population is geographically significant. Northern Ghana—including the Northern, Upper East, Upper West, North East and Savannah regions—has a relatively higher concentration of Muslim populations compared with the southern regions.

These same regions have historically experienced lower levels of banking penetration and fewer financial institutions, leading many individuals to rely on informal financial arrangements such as rotating savings groups.

Introducing non-interest banking products could therefore provide additional financial options for individuals who prefer alternatives to conventional interest-based financial services.

Insights from the National Banking College Survey

Recent research conducted by the National Banking College provides additional insight into awareness and institutional readiness for non-interest banking within Ghana’s financial sector.

Table 2: National Banking College Survey on Non-Interest Banking Awareness (2026)

Survey Question	Yes	No	Not Applicable
Awareness of non-interest banking among staff	50%	25%	25%
Does non-interest banking offer opportunities for growth or financial inclusion?	55%	5%	40%
Are there barriers limiting adoption of non-interest banking products?	30%	35%	35%

Source: National Banking College Survey (2026).

The survey suggests that awareness of non-interest banking is growing within Ghana’s financial sector, although knowledge gaps remain. Importantly, more than half of respondents indicated that non-interest banking could create opportunities for institutional growth and financial inclusion.

Respondents also identified several areas where capacity building would be beneficial, including training in Islamic finance principles, product structuring, risk management and regulatory frameworks.

Lessons from International Experience

International experience offers useful lessons on the role non-interest banking can play in supporting financial inclusion and financial sector diversification.

Table 3: Comparative Snapshot of Non-Interest Banking Development

Country	Key Non-Interest Banking Institutions	Share of Banking Sector	Key Policy Outcome
Ghana	Emerging sector under regulatory guidance from the Bank of Ghana	Limited formal penetration	Potential to expand financial inclusion and SME financing
Nigeria	Jaiz Bank and non-interest windows in conventional banks	Growing presence since 2012	Expanded banking access in northern regions
Malaysia	Islamic banks regulated by Bank Negara Malaysia	Over 30% of banking assets	Highly developed dual banking system
Global Industry	Institutions guided by Islamic Financial Services Board standards	Over US$3.5 trillion in assets	Rapid global industry growth

The international experience demonstrates that non-interest banking can operate successfully alongside conventional banking within a diversified financial system. Countries such as Nigeria and Malaysia illustrate how alternative financial models can attract previously underserved populations while supporting SME financing and financial sector innovation.

Opportunities for Ghana’s Financial Sector

If effectively implemented, non-interest banking could create several opportunities for Ghana’s financial system.

First, it could help attract individuals who avoid conventional banking due to religious or ethical preferences.

Second, partnership-based financing models could support SMEs that struggle to meet the collateral requirements of traditional bank lending.

Third, asset-based financing structures could facilitate investment in productive sectors such as agriculture, manufacturing and small-scale trade.

Finally, the introduction of non-interest financial products could stimulate innovation within Ghana’s financial sector.

Policy and Institutional Considerations

For non-interest banking to succeed, a supportive regulatory environment will be essential. The Bank of Ghana has issued the Guideline for the Regulation and Supervision of Non-Interest Banking in Ghana, which provides the regulatory framework for the licensing, operation and supervision of non-interest banking institutions. The guideline outlines key requirements relating to governance, risk management and compliance, and provides clarity on permissible financing structures within the financial system.

In addition to banking regulation, the development of non-interest finance in Ghana requires coordination with the Securities and Exchange Commission Ghana. The SEC is responsible for regulating capital market activities, including investment products and securities offerings.

As Ghana explores non-interest finance, there is potential for the development of Shariah-compliant capital market instruments, such as Sukuk, which would fall under the regulatory oversight of the SEC. Strengthening coordination between the Bank of Ghana and the SEC will therefore be important in supporting a well-functioning and inclusive non-interest finance ecosystem.

However, several additional steps will be important.

First, financial sector regulators must ensure that institutions offering non-interest banking products maintain strong governance and risk management frameworks.

Second, public awareness and financial literacy programmes will be necessary to clarify misconceptions about non-interest banking.

Third, Ghana will need to build technical expertise in Islamic finance and alternative financial structures. Universities, training institutions and professional bodies can play a critical role in developing the necessary skills.

Conclusion

Ghana has made remarkable progress in expanding financial inclusion through digital financial services. Mobile money has transformed financial access and allowed millions of citizens to participate in the financial ecosystem.

However, the next stage of financial inclusion will require expanding the range of financial products available to citizens, particularly those that support productive investment and economic growth.

Non-interest banking represents one possible pathway toward achieving this objective. By offering partnership-based financing structures and asset-backed financial products, it could help expand access to financing for SMEs, farmers and entrepreneurs while attracting populations that currently avoid conventional banking.

Ultimately, Ghana’s financial sector should evolve into a diverse and inclusive financial ecosystem where multiple financial models coexist to meet the needs of different segments of society.

A coordinated regulatory approach involving both the Bank of Ghana and the Securities and Exchange Commission will be critical to ensuring that non-interest banking and related financial instruments develop within a sound and integrated regulatory framework.

Within such an ecosystem, non-interest banking could play an important role in ensuring that financial inclusion translates not only into access—but also into sustainable economic participation and development.

References

Bank of Ghana. (2026). Guideline for the Regulation and Supervision of Non-Interest Banking in Ghana. Accra: Bank of Ghana.

Bank of Ghana. (2024). Payment systems oversight annual report. Accra: Bank of Ghana.

Central Bank of Nigeria. (2020). Guidelines on non-interest banking operations. Abuja: Central Bank of Nigeria.

Ghana Statistical Service. (2021). 2021 population and housing census general report. Accra: GSS.

Islamic Financial Services Board. (2024). Islamic financial services industry stability report. Kuala Lumpur: IFSB.

National Banking College. (2026). Survey on awareness and institutional readiness for non-interest banking in Ghana. Accra: National Banking College.

World Bank. (2022). Global Findex database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. Washington, DC: World Bank.

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