Ghana’s savings and loans sector is facing growing pressure from bad loans, with the industry’s non-performing loan (NPL) ratio rising sharply to nearly 20%, prompting the Bank of Ghana (BoG) to intensify reforms aimed at strengthening credit risk management.
Speaking at the grand opening of the head office of Advance Ghana Savings and Loans, Second Deputy Governor of the Bank of Ghana, Matilda Asante Asiedu, said the sector’s NPL position had deteriorated significantly in recent months.
Referencing data to justify her case, he noted that the NPL ratio in the savings and loans sector stood at 15.35% in July 2025 but has now climbed to 19.44%.
This means that nearly GH¢20 out of every GH¢100 lent by institutions in the sector is now classified as non-performing, signalling a serious deterioration in borrowers’ ability to repay their loans.
The development, Matilda Asante Asiedu said, leaves the sector with “more work to be done” in the final quarter of the year to bring its performance back in line with regulatory expectations.
In response to the growing credit risks, the Bank of Ghana is preparing to introduce new directives on credit risk management.
The directive will require financial institutions to establish stronger frameworks for managing credit and other related risks, while ensuring that institutions maintain robust credit risk environments and sound loan-underwriting processes.
The objective is to prevent institutions from taking excessive risks when granting loans and strengthen their ability to identify, assess and manage borrowers’ repayment risks. For the BoG, the issue goes beyond the financial health of individual savings and loans companies.
The second deputy speaker further noted that savings and loans and microfinance institutions play an important role in Ghana’s economy, particularly because they serve groups that traditional banks have often struggled to reach.
The sector provides financing to young people, women and small and medium-sized enterprises (SMEs), supporting financial inclusion, employment, poverty reduction and economic growth.
But the rising NPL ratio threatens that role. “A sector carrying this responsibility must be strong enough to bear it,” she said.
The BoG’s reforms, she stressed, are therefore aimed at building a stronger and more resilient sector capable of continuing to finance underserved businesses and households without exposing depositors and the wider financial system to excessive risks.
