Chief Executive Officer of Dusk Capital, Bernard Osei Tutu, is calling for urgent policy action to reduce Ghana’s high non-performing loan (NPL) ratio, which he says continues to limit access to credit for businesses.
Despite signs of macroeconomic recovery, he warned that the current NPL rate, hovering around 23.1% poses a serious threat to private sector growth and must be addressed through coordinated reforms.
“Until we have a policy whereby we will continue to bring non-performing loans drastically to a single-digit number, 23% is still extremely high especially now that risk has dropped. If the banks want to lend more, they will still be a bit risky until they see that there’s a bigger drop in our non-performing loans.” Osei Tutu noted.
The central bank’s latest data indicates a modest improvement, with NPLs declining from 24.2% in June 2024 to 23.1% by June 2025. While this signals a slow recovery in asset quality, Osei Tutu believes it is not nearly enough to instill confidence in commercial lenders, particularly in the SME and consumer finance space.
He pointed out that challenges such as poor address systems and weak borrower traceability continue to hinder loan recovery efforts.
“The biggest issue with the commercial banks has to do with the ability to locate a person when they take the loan. Even now, our addressing system is still not enough,” he noted, calling for institutions like Rent Control to play a more active role in borrower verification and traceability.
He emphasized that if non-performing loans can be structurally curtailed, the outcome would be transformational for business credit.
“If you’re able to do that, you put the commercial banks in a very good position to also open up and lend it up to the investing public businesses, SMEs, and consumers,” he said.
Mr. Osei Tutu also praised recent fiscal and monetary policy coordination, especially the Bank of Ghana’s decision to cut the benchmark policy rate by 300 basis points from 28% to 25%. He believes this, coupled with falling treasury bill rates, creates an environment where commercial banks are more likely to lend to businesses than park their funds in government securities.
“One trend which is very good is the fact that government has been able to bring treasury bill rates down drastically. 91-day and 182-day bills have dropped significantly. That means the banks will now have less appetite for government securities and more incentive to lend to businesses,” he explained.
However, he cautioned that this opportunity comes with responsibility. “They [the banks] also have to make sure that they are still lending, but with all the necessary controls security, compliance, and risk assessments so that the NPLs do not continue to rise.”
With the country’s Capital Adequacy Ratio improving from 14.3% to 19.7% year-on-year and inflation showing signs of retreat, Mr. Osei Tutu described the current economic environment as “exciting times” for businesses and SMEs alike.
“It is my prayer that government will continue to be intentional about what they are doing you can see that synergy between the monetary policy department and the fiscal policy department as we work together to achieve all of these results.”
As Ghana continues its path toward macroeconomic stability, stakeholders will be watching closely to see if the downward trend in NPLs can be accelerated and whether banks will finally open their vaults wider to the private sector.
