Amid the high Non-Performing Loans (NPLs) threatening the stability and profitability of the country’s financial sector, the Bank of Ghana (BoG) has introduced some stringent measures to ensure loan repayment discipline.
Among the new measures is a framework that defines what makes a borrower a wilful defaulter. This move, the regulator says, is aimed at protecting the financial sector from rising bad loans and discouraging borrowers who take loans with no intention of paying back.
Under the directive, borrowers who fall into any of the following six categories could be officially branded as wilful defaulters. This is an infamous tag that could ruin their access to future credit.
According to the directive cited by The High Street Journal, here the six ways a borrower could be classified that he or she has been wilfully defaulted.
When You Can Pay But Refuse
The Bank of Ghana says if you have the means, in this case, could be regular income, business cash flow, or assets, but still refuse to repay your loan, you’re a wilful defaulter. BoG calls this a clear case of negligence or disregard for obligations.
Diverting Loan Funds for Other Purposes
Taking a loan for one purpose but channeling it into something completely different without the bank’s approval is another red flag. For instance, you could fall in the wilful defaulters category if you take a loan for your shop but spend it on a holiday.
Using Fake or Misrepresented Collateral
If you secure a loan by presenting falsified land documents, overstated asset values, or fraudulent paperwork, you don’t just risk being blacklisted; you may face legal action for fraud.
Defaulting with Multiple Institutions
Borrowers who owe two or more banks or microfinance institutions at the same time, without making repayment efforts, will also be branded wilful defaulters. The only exception is if they can prove genuine hardship, such as job loss, disability, or force majeure.
Disappearing Without a Trace
Under the new directive, if a borrower relocates without notifying the bank of their new address or contact, while leaving unpaid loans behind, BoG says that counts as wilful default.
Selling Off Collateral Without Consent
Collateral is meant to give banks security, but some borrowers secretly sell or move pledged assets. For example, selling a car or land you used as collateral without informing your bank is a direct path to being blacklisted.
What This Means for Borrowers
Being classified as a wilful defaulter carries heavy consequences. The Bank says it can cut off your access to future loans, damage your credibility, and even expose you to criminal prosecution.
This means that, for customers of banks who treat loans as free money, the Bank of Ghana is coming hard at them. The new framework ensures that only genuine borrowers will continue to access credit.”
But the advice to customers is that borrow responsibly, use funds for the agreed purpose, and stay transparent with your lender, and you will avoid being classified as a wilful defaulter.
