The Bank of Ghana has issued a Credit Risk Management Directive that will come into force on 1 July 2027 for all banks, savings and loan institutions, finance houses and financial holding firms. The directive urges Regulated Financial Institutions (RFIs) that engage in cross‑border lending, trade finance or foreign currency exposure to have robust policies for identifying, assessing, measuring, evaluating, monitoring, reporting and controlling country and transfer risk.
Officials said the move is aimed at preventing potential defaults or deterioration in the credit quality of foreign counterparties that could arise from country‑specific macroeconomic, fiscal, political or financial sector conditions. The directive also cautions RFIs against launching new products or market entries without the necessary regulatory approvals.
Key provisions include strict due‑diligence procedures, such as obtaining references from known parties, accessing credit reference bureaus and vetting the integrity, experience and financial condition of company managers. RFIs must also establish clear credit‑granting criteria that specify eligible borrowers, credit types, amounts, tenors and terms.
Under the new framework, RFIs are required to conduct comprehensive credit risk assessments that are proportionate to the nature, type and size of each exposure, and to diversify loan portfolios across sectors, geography, borrower types and risk mitigants within local market constraints. For individual borrowers, the assessment must consider the purpose, repayment structure, income verification, current risk profile and sensitivity to economic developments.
Bank of Ghana officials emphasized that the directive’s broad objective is to enhance the resilience of RFIs by ensuring they implement effective credit risk management systems commensurate with their risk‑taking activities and capital strength.
Financial institutions are expected to begin implementing the new requirements in the coming months, with full compliance required by the July 2027 deadline. The Bank will monitor adherence and may impose sanctions for non‑compliance.
