Matilda Asante-Asiedu
The Bank of Ghana (BoG) is set to issue a new Credit Risk Management Directive to strengthen lending practices, improve loan recovery and address rising non-performing loans (NPLs) in the financial sector.
The Second Deputy Governor, Matilda Asante-Asiedu, announced this at the commissioning of Advans Ghana Savings and Loans’ new head office at Dzorwulu in Accra.
She said the directive will require Regulated Financial Institutions (RFIs) to establish robust credit risk management frameworks covering credit underwriting, loan administration, risk measurement, monitoring and recovery.
“This directive aims to ensure that Regulated Financial Institutions (RFIs) develop and implement appropriate frameworks for managing their credit risk by establishing a robust credit risk environment; a sound credit-underwriting process; and maintaining appropriate credit administration, measurement, monitoring, and recovery processes and functions,” she stated.
The directive will also set clear requirements for how institutions assess borrowers, manage credit risk and monitor loans to reduce the accumulation of bad debts.
Savings and Loans NPLs Rising
The announcement comes as the savings and loans sub-sector faces growing pressure to improve its loan portfolios.
The BoG expects RFIs to bring their NPL ratios down to no more than 10 per cent by the end of December 2026. While the industry-wide ratio has improved, the sub-sector’s has deteriorated.
“The banking industry’s ratio stood at 16.1 per cent at end-June 2026, down from over 23 per cent a year earlier. However, for the Savings and Loans sub-sector, the NPL deteriorated from 15.35% in June 2025 to 19.44% for the same period in 2026. So, there is real work ahead of us in this last quarter to bring this in line with the regulatory expectation,” Mrs. Asante-Asiedu said.
She noted that the BoG’s 2025 Notice on Non-Performing Loans had already set supervisory expectations for credit risk governance, prudential limits for NPL ratios and remedial measures for willful defaulters.
The new directive, she said, reinforces these measures by requiring stronger credit risk management systems and more effective oversight of lending across the loan cycle, complementing existing regulatory measures to improve asset quality and strengthen the financial system.
A Business Desk Report