Accra: The Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has mandated all regulated banks and financial institutions to ensure that their non-performing loans (NPLs) do not exceed 10% by the end of December 2026. This directive aims to alleviate the ongoing challenge of high bad loan ratios, which have been impeding business access to credit.
According to Ghana Web, Dr Asiama emphasized that while progress has been made in reducing bad loans, the current levels remain problematic. Speaking at the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP) Ghana-Bank of Ghana Forum on August 4, 2026, he highlighted the sector's improvement, noting that the bad loan ratio had decreased to 16.1% by the end of June 2026, down from over 23% the previous year.
Dr Asiama acknowledged that banks remain well-capitalized, with the Capital Adequacy Ratio at 20.4%, providing them with the ability to engage in measured risk-taking. Despite these improvements, he stressed the need for further reduction in the NPL ratio as the current level, even when fully provisioned, remains excessive.
The Governor outlined several strategies for banks to achieve the target, including enhancing borrower assessments, improving loan recovery processes, and writing off irrecoverable loans. He asserted that reducing bad loans is crucial for increasing lending capacity to businesses.
Furthermore, Dr Asiama urged banks to practice responsible lending as Ghana implements the Corporate Insolvency and Restructuring Act. This act is designed to support the recovery of viable businesses experiencing financial difficulties, rather than allowing them to fail. He cautioned that financial support should be judiciously managed to avoid masking losses.
In collaboration with industry stakeholders, the Bank of Ghana is developing comprehensive rules for business restructuring. These guidelines aim to facilitate business recovery while safeguarding the financial system's integrity.