Bank of Ghana Governor Calls for Urgent Action to Reduce Bad Loans in Banks
Dr. Johnson Asiamah, the Governor of the Bank of Ghana, has raised serious concerns about the high levels of non-performing loans (NPLs) in the country’s banking sector.
He stressed that these unpaid loans are a major threat to financial stability and must be reduced as soon as possible.
Speaking at the National Economic Dialogue 2025, Dr. Asiamah explained that while financial reforms under the government’s program are ongoing, bad loans remain a big problem.
He pointed out that some local banks are struggling, with one having an NPL ratio of 81%. This means that for every 100 Ghana cedis lent out, 81 cedis are not paid back.
Another local bank has a 62% bad loan rate, while the worst among foreign banks is around 21%. Myjoyonline reported that such high levels of unpaid loans make it difficult for banks to operate smoothly.
Dr. Asiamah noted that although banks are partly responsible, the situation has worsened because of the Domestic Debt Exchange Programme, which has affected loan repayments.
He warned that when banks have too many unpaid loans, they raise lending rates, making it harder for businesses to access affordable credit.
To fix this issue, Dr. Asiamah said there is a need to find practical solutions, especially for local and government-owned banks.
According to Myjoyonline, he has already started discussions with banking industry leaders and is committed to working with them to bring down bad loan rates.
He believes that once NPL ratios are lowered and the financial situation improves, lending rates will also decrease, making borrowing cheaper for businesses.
The Bank of Ghana is prepared to make difficult but necessary decisions to tackle the problem. Dr. Asiamah assured the public that these measures are crucial for strengthening the banking sector and improving Ghana’s economy.
He emphasized, as reported by myjoyonline, that while some decisions may be tough, they are essential for ensuring long-term financial stability.
Credit: myjoyonline