The Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has directed all regulated financial institutions to reduce their non-performing loans (NPLs) to not more than 10 percent by the end of December 2026, warning that high levels of bad loans continue to constrain lending and weigh on Ghana's economic development.
According to the Governor, although the banking sector has made significant progress in cleaning up its balance sheets, more work is needed to strengthen credit quality and create room for increased lending to businesses.
Speaking at the Chartered Institute Of Restructuring and Insolvency Practitioners (CIRIP) Ghana–Bank of Ghana Forum in Accra, Dr. Asiama disclosed that the industry's NPL ratio had declined to 16.1 percent at the end of June 2026, down from over 23 percent during the same period last year, while the sector's Capital Adequacy Ratio stood at 20.4 percent.
He said the improved capital position gives banks greater capacity to take carefully considered lending decisions but stressed that the current level of bad loans remains unacceptably high.
The industry's non-performing loans ratio declined to 16.1 percent as at end-June this year, compared to over 23 percent a year ago, while the Capital Adequacy Ratio stood at 20.4 percent. Capital of that order is what gives a bank the room to take considered risks."
The Governor, however, cautioned that the gains made by the banking sector should not lead to complacency.
That is progress and not sufficiency, and 16.1 percent remains too high, even if it is fully provisioned. Our regulatory measures require each regulated institution to reduce its ratio to no more than 10 percent by the end of December this year."
Dr. Asiama explained that banks would be expected to achieve the target through stronger credit appraisal processes, board-approved strategies to reduce bad loans, more effective loan recovery mechanisms and the write-off of fully provisioned exposures with no realistic prospects of recovery.
He noted that reducing bad loans is critical to expanding credit to the private sector and supporting economic growth.
High non-performing loans tie up capital. They raise recovery costs and restrict new credit, more severely for smaller and higher-risk borrowers. So reducing them is therefore not merely a supervisory concern. It is part of Ghana's development agenda."
The Governor also underscored the need for banks to maintain sound credit discipline as Ghana seeks to operationalise the Corporate Insolvency and Restructuring Act (Act 1015), which allows viable but distressed businesses to be restructured rather than liquidated.
He stressed that while banks should support businesses with credible recovery prospects, such financing must not be used to conceal existing losses or weaken prudent lending standards.
Post-commencement financing must reinforce that discipline, not work around it."
Dr. Asiama further called for a predictable and coordinated framework for business rescue financing, saying banks, insolvency practitioners, borrowers and creditors require clear rules governing restructuring processes.
Ghana needs a predictable framework, not case-by-case improvisation. Banks, insolvency practitioners, borrowers and existing creditors need clarity on the evidence required, the controls that must be in place, the treatment of new and legacy exposures, and the consequences if a rescue fails."
He said the Bank of Ghana is working with CIRIP Ghana, the Ghana Association of Bankers, the Institute of Chartered Accountants Ghana and other stakeholders to develop a practical and risk-sensitive framework that supports business recovery while safeguarding financial stability.
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