The Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has tasked all regulated banks and financial institutions to reduce their bad loans to no more than 10% by the end of December 2026.

Bad loans, also known as non-performing loans (NPLs), are loans that borrowers have failed to repay for an extended period.

He said although banks have made progress in reducing these loans, the current level remains too high and is making it difficult for businesses to access credit.

Speaking at the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP) Ghana-Bank of Ghana Forum on August 4, 2026, Dr Asiama said the banking sector’s bad loan ratio dropped to 16.1% at the end of June 2026 from more than 23% a year earlier.

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He added that banks remain well-capitalised, with the sector’s Capital Adequacy Ratio standing at 20.4%.

“The industry's non-performing loans ratio declined to 16.1 percent as at end-June this year, compared to over 23 percent a year ago, while the Capital Adequacy Ratio stood at 20.4 percent. Capital of that order is what gives a bank the room to take considered risks,” he said.

Despite the improvement, he said banks must do more.

“That is progress and not sufficiency, and 16.1 percent remains too high, even if it is fully provisioned. Our regulatory measures require each regulated institution to reduce its ratio to no more than 10 percent by the end of December this year,” he said.

Dr Asiama said banks can achieve the target by improving how they assess borrowers, recovering unpaid loans more effectively, and writing off loans that are unlikely to be recovered.

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He said reducing bad loans is important because it allows banks to lend more money to businesses.

The Governor also urged banks to maintain responsible lending as Ghana implements the Corporate Insolvency and Restructuring Act, which allows struggling but viable businesses to recover instead of shutting down.

He said financial support for such businesses should be properly managed and not used to conceal losses.

Dr Asiama added that the Bank of Ghana is working with industry stakeholders to develop clear rules for business restructuring that will support business recovery while protecting the country’s financial system.

DR/MA

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