The Bank of Ghana (BoG) has announced plans to introduce a new Credit Risk Management Directive aimed at improving lending practices, strengthening loan recovery systems and reducing the growing problem of non-performing loans (NPLs) across Ghana’s financial sector.
The proposed directive is expected to promote responsible lending, improve credit risk assessment and enhance financial stability among banks and other regulated financial institutions in the country.
Second Deputy Governor of the Bank of Ghana, Mrs Matilda Asante-Asiedu, disclosed the development on Wednesday, October 7, during the commissioning of the new head office of Advans Ghana Savings and Loans in Dzorwulu, Accra.
According to her, the directive will require Regulated Financial Institutions (RFIs) to establish comprehensive credit risk management frameworks to guide their lending operations and minimise the risk of loan defaults.
The framework will cover key areas of credit management, including credit underwriting, loan administration, risk measurement, continuous monitoring and loan recovery. These measures are expected to improve how financial institutions evaluate borrowers, manage credit exposure and recover outstanding debts.
The Bank of Ghana’s planned intervention comes amid concerns about non-performing loans, which can affect the profitability of financial institutions, restrict lending to businesses and individuals, and pose risks to the stability of the banking industry.
By strengthening credit risk management standards, the central bank aims to encourage sound lending decisions, improve loan repayment rates and support a more resilient financial system.
The proposed directive could also help promote better banking practices, improve access to sustainable credit and strengthen confidence in Ghana’s financial services industry.
Source: newsthemegh.com