Omanghana
The Bank of Ghana has directed all commercial banks operating in the country to reduce their non-performing loan ratios to below 10 per cent by December 2026.
The central bank issued the ultimatum during a recent high-level meeting with financial industry stakeholders amid growing concerns about the quality of assets held by banks.
The directive follows financial sector updates showing an increase in non-performing loans, which are credit facilities on which borrowers have failed to make scheduled principal or interest payments for a specified period.
The Bank of Ghana warned that allowing bad loans to continue rising could weaken commercial banks, limit their ability to provide credit to productive sectors and threaten the stability of the wider financial system.
The measure forms part of the central bank’s broader effort to strengthen risk management as total assets within Ghana’s financial sector climbed above GH¢647 billion earlier in 2026.
With inflation remaining near six per cent, its lowest level in several years, the regulator expects banks to use the period of relative macroeconomic stability to strengthen their balance sheets and address longstanding problem loans.
To meet the December deadline, banks are expected to intensify loan-recovery efforts and restrict further credit to borrowers with persistent records of default.
Financial institutions may also pursue legal action against chronic defaulters and auction collateral securing loans where borrowers fail to honor agreed repayment arrangements.
Banks are additionally expected to strengthen their credit-scoring and risk-assessment systems before approving new facilities. The objective is to prevent the accumulation of further bad debts while ensuring that borrowers can realistically meet their repayment obligations.
The directive could also encourage greater use of credit bureau data to assess applicants’ repayment histories and overall exposure across the financial system.
Banks that fail to reduce their non-performing loan ratios below the required threshold by the end of 2026 could face regulatory action.
Possible sanctions may include restrictions on dividend payments, closer supervisory monitoring or instructions to inject additional capital to cover elevated credit risks.
While stronger recovery measures are expected, banks must follow due process when enforcing collateral and dealing with borrowers facing financial difficulty. Customers have also been encouraged to engage their banks early to restructure loans where necessary rather than allowing their accounts to fall into default.
The Bank of Ghana believes the reduction of non-performing loans will strengthen confidence in the banking sector, protect depositors and improve the flow of sustainable credit to businesses and households.
Source: Omanghana
