Omanghana
The Bank of Ghana has directed regulated financial institutions to reduce their non-performing loan ratios to no more than 10 per cent by the end of December 2026, as part of efforts to strengthen financial stability.
The measures, issued in August 2025, require stronger credit controls and action on problem loans. Microfinance institutions remain subject to their existing five per cent limit.
After the deadline, institutions exceeding the applicable threshold must notify the central bank within 10 working days and submit a board-approved reduction plan within 30 days. The plan must target compliance within one year.
Dividend and bonus restrictions will apply immediately to institutions with NPL ratios of at least 15 per cent from January 2027. For ratios above 10 per cent but below 15 per cent, those restrictions follow two consecutive years of non-compliance.
BoG Governor Dr. Johnson Asiama has said improving loan quality is essential to expanding credit access, particularly for smaller businesses.
The banking industry’s NPL ratio fell to 16.1 per cent in June 2026 from 23.1 per cent a year earlier. Total banking assets reached GH¢502.4 billion, while the capital adequacy ratio stood at 20.4 per cent.
Despite that improvement, the governor stressed that further progress was needed because bad loans tie up capital, increase recovery costs and constrain new lending.
The regulatory framework also requires stronger loan monitoring and accurate credit-bureau reporting. Fully provisioned loans with no realistic recovery prospects may be written off with prior BoG approval, although institutions retain the right to pursue repayment.
Source: Omanghana
