
The Bank of Ghana (BoG) has announced plans to introduce a new Credit Risk Management Directive aimed at strengthening lending practices and improving loan recovery across the financial sector. Announced by the Second Deputy Governor, Mrs. Matilda Asante-Asiedu, the directive specifically targets the rising non-performing loan (NPL) ratios currently plaguing the savings and loans sub-sector. The central bank has set a clear mandate for Regulated Financial Institutions (RFIs) to bring their NPL ratios down to no more than 10% by the end of December 2026.
Under the upcoming directive, financial institutions will be required to develop and implement robust credit risk management frameworks. These frameworks are designed to enhance the quality of assets and ensure that lending processes are more rigorous, thereby preventing the accumulation of bad debt. Mrs. Asante-Asiedu emphasized that the move is necessary as the savings and loan sub-sector faces increased pressure from deteriorating loan portfolios, which threatens the overall stability of the financial system.
This regulatory shift is part of a broader Bank of Ghana initiative to improve corporate governance and foster greater public confidence in Ghana's financial institutions. In addition to the NPL targets, providers in the sector will be required to comply with stricter capital requirements by December 31, 2026. The restructuring process will also involve new classifications for savings and loans companies, ensuring that they are better equipped to handle economic fluctuations and maintain liquidity in the long term.