BoG Praised for Tightening Credit Controls as Loan Growth Surges Under Falling Interest Rates
The Bank of Ghana is implementing stricter credit-quality measures to prevent non-performing loans as banks increase lending due to falling interest rates. Financial experts warn that while credit expansion is necessary for economic growth, banks must maintain due diligence to avoid future instability.
Why it matters
Effective central bank oversight is critical for maintaining financial stability in developing economies during periods of monetary easing.
The Bank of Ghana (BoG) has been commended for taking proactive steps to safeguard the banking sector against a potential rise in non-performing loans (NPLs) as declining interest rates encourage banks to expand lending.
Head of Trading, Global Markets at Absa Bank Ghana , Andrews Akoto , believes rapid credit expansion could expose banks to higher credit risk if proper lending standards are not maintained - a concern the central bank has already moved to address through stricter credit‑quality measures.
Speaking on Channel One TV's Quarterly Economic Outlook , he said: "With regard to credit quality, I think the Bank of Ghana has done a lot with that. They have been very proactive. Last year in August, they set a target for non-performing loan ratios."
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