The Bank of Ghana (BoG) has flagged risks linked to the rapid expansion in private‑sector credit, calling on banks to uphold sound underwriting standards and strengthen risk‑management as lending conditions ease.
Private‑sector credit growth accelerated to 35.5% in August 2026, up from 13.3% a year earlier, reflecting stronger credit demand and improved financing conditions. In real terms, credit growth stood at 29%, compared with about 1.7% over the same period last year.
The acceleration has been supported by a significant decline in the average lending rate across the banking sector.
Speaking at a meeting with heads of banks at the Bank Square on Tuesday, 6 October 2026, Governor Dr Johnson Asiama said the BoG sees the recovery in credit as a positive development for economic activity, but banks must ensure that the pace of lending does not undermine asset quality.
“The Bank continues to monitor developments in asset quality closely. Although the NPL ratio has declined significantly, it remains elevated relative to regulatory thresholds. Banks are therefore expected to continue strengthening credit risk management, while ensuring full compliance with the NPL guidelines. At the same time, as private sector credit expands rapidly, this growth must be supported by sound underwriting standards and effective risk‑management frameworks,” he said.
Against this backdrop, the BoG is preparing to issue a new Credit Risk Management Directive to strengthen the way banks manage credit throughout the lending cycle. The directive will complement the NPL Notice issued by the central bank last year and will provide a broader framework for managing credit risks.
Dr Asiama said the directive will cover key areas of the credit process, including credit origination, administration, monitoring, measurement and recovery. “The Bank will soon issue the Credit Risk Management Directive, which will complement the NPL Notice issued last year. The Directive will strengthen banks’ credit‑risk frameworks, covering credit origination, administration, monitoring, measurement and recovery.”
He added that the new framework is intended to protect asset quality while supporting sustainable growth in lending. “We expect this to further strengthen asset quality and ensure that credit expansion is sustainable,” he said.
The BoG’s move comes as easing financial conditions and stronger demand for credit drive a significant increase in lending to the private sector.
