Despite the effects of increased interest rates, the Bank of Ghana (BoG) has advised banks to keep lending money to sustainable firms, especially those in sensitive industries.
The request was made by BoG Governor Dr. Johnson P. Asiama on April 9 during the first post-MPC meeting with bank CEOs in Accra.
He emphasized the significance of assisting productive businesses and identifying ways to lessen the impact on the sectors most affected by these changes, even if he noted that the recent hike in the policy rate to 28.0 percent will increase borrowing costs.
In addition, Dr. Asiama voiced worries over the state-owned and domestically controlled banks’ financial stability.
Even though the banking industry as a whole is still profitable, a number of these institutions are having trouble staying solvent, especially because their recapitalization plans are not entirely apparent.
He emphasized that resolving these institutions’ capital shortages is essential to preserving their financial stability.
In addition, the governor expressed concern about the growing non-performing loan (NPL) ratio, which as of February 2025 was 22.57 percent.
Weak credit risk management and subpar underwriting procedures have been largely blamed for this surge.
To lower the danger of additional defaults, Dr. Asiama urged banks to strengthen their internal controls, which should include improving loan monitoring and early warning systems.
Source: newsthemegh.com