The Bank of Ghana (BoG) has intensified efforts to ensure financial stability in the country by calling on businesses and individuals to honour their loan repayment obligations.
This comes amid growing concerns over the misuse of credit and rising default rates, which the central bank says pose a significant threat to Ghana’s credit system.
Speaking at a sensitisation programme organised for members of the Ghana National Chamber of Commerce and Industry (GNCCI) on the Borrowers and Lenders Act, the Second Deputy Governor of the Bank of Ghana, Matilda Asante Asiedu, emphasised the importance of responsible borrowing and lending practices.
Mrs. Asante Asiedu urged borrowers to respect their loan commitments and apply credit strictly for its intended purpose. She explained, “We want borrowers to understand that loans must be repaid. Honour your repayment obligations and apply the credit strictly for the purpose for which it was secured.”
The Deputy Governor warned that misuse of loans and increasing default rates undermine confidence in the financial system. She added, “Misuse of loans and increasing default rates undermine confidence in the financial system, and this must change if we want a more resilient economy.”
She noted that maintaining credit discipline is not just a matter of individual responsibility but a critical element for the broader economy. Without proper adherence to loan terms, financial institutions may become reluctant to extend credit, ultimately restricting access to capital for businesses and households.
Educating Borrowers and Lenders
The sensitisation programme is part of BoG’s ongoing initiative to strengthen transparency and enforce the Borrowers and Lenders Act. By educating both borrowers and lenders, the central bank aims to foster a culture of accountability in the financial sector.
Mrs. Asante Asiedu highlighted the importance of understanding the legal rights and responsibilities that govern borrowing and lending. She noted that the central bank would continue to intensify educational efforts to build stronger credit discipline across the sector.
“Education is key to ensuring that both borrowers and lenders understand their responsibilities. This will help reduce defaults and improve confidence in the financial system.”
Mrs. Asante Asiedu
The GNCCI, representing businesses across Ghana, also weighed in on the need for better access to finance, particularly for micro, small, and medium-sized enterprises (MSMEs). President of the GNCCI, Stephane Abass Miezan, called on the Bank of Ghana and financial institutions to make credit more accessible, noting the high barriers that often prevent businesses from securing loans.
“We are appealing to the Bank of Ghana and financial institutions to make credit more accessible, especially for SMEs who are struggling to meet the high requirements.”
Mrs. Asante Asiedu
While Mr. Miezan acknowledged that discipline is crucial for a healthy financial system, he stressed that businesses require a supportive credit environment to grow and contribute effectively to Ghana’s economic development.
Balancing Discipline with Access
The call from the BoG for stricter adherence to repayment obligations does not diminish the importance of credit availability for businesses. Instead, it seeks to create a balance between responsible borrowing and accessible finance.
By ensuring that loans are used for their intended purposes, the central bank hopes to reduce default risks and maintain a resilient financial sector. This balance is particularly important for Ghana’s SMEs, which play a key role in employment creation and economic growth.
As the Bank of Ghana intensifies efforts to crack down on loan misuse, the message is clear: responsible borrowing is essential for a stable and resilient financial system. Borrowers must honour their repayment obligations, and credit should be applied strictly for the purposes for which it was secured.
The partnership between the BoG and organisations such as the GNCCI underscores the importance of both discipline and accessibility in the financial sector. Through education, enforcement of the Borrowers and Lenders Act, and supportive credit policies, Ghana aims to strengthen confidence in its financial institutions while promoting sustainable economic growth.
By fostering a culture of accountability and responsible credit use, the Bank of Ghana is not only protecting the interests of lenders but also ensuring that businesses, particularly SMEs, can thrive in a stable and reliable financial environment.
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