Ghana’s financial sector continues to grapple with rising non-performing loans, a development that poses risks to financial stability, credit availability, and business growth.

Against this backdrop, the Chartered Institute of Credit Management Ghana (CICMG) is stepping up efforts to strengthen credit discipline and improve recovery rates across the economy. At the heart of this initiative is the Institute’s newly introduced Debt Recovery School, a practical training programme designed to equip financial institutions and businesses with the tools needed to manage credit more effectively and reduce loan defaults.

The Initiative reflects growing concerns within the financial sector about the sustainability of lending practices, particularly as banks, microfinance institutions, savings and loans companies, and SMEs struggle with weak recovery mechanisms.

CICMG believes that strengthening professional capacity in credit management is a critical step toward reversing this trend and restoring confidence in Ghana’s credit system.

CICMG’s Strategic Focus on Practical Training

Unlike conventional academic programmes, the Debt Recovery School places strong emphasis on real-life applications. According to CICMG, many institutions understand credit theory but lack practical skills in assessment, monitoring, and recovery. The new school is designed to bridge this gap by offering hands-on training that reflects the realities lenders face in the field.

The programme targets a wide range of participants, including banks, non-bank financial institutions, SMEs, and businesses operating within the informal sector. By broadening its reach, CICMG aims to ensure that responsible lending and effective recovery practices are not limited to large institutions but are adopted across the entire credit value chain.

Applying the Pareto Principle to Debt Recovery

A key feature of the Debt Recovery School is its focus on the Pareto principle, commonly referred to as the 80–20 rule. Registrar of CICMG, Amo Agyapong, explains that this approach helps institutions identify the small portion of debtors responsible for the largest share of outstanding loans. By concentrating recovery efforts on these critical accounts, organisations can achieve better results with fewer resources.

The application of this principle introduces structure and efficiency into recovery processes. Instead of spreading limited resources thinly across numerous low-impact cases, lenders are trained to prioritise accounts that significantly influence their non-performing loan ratios. CICMG believes this method will help institutions reduce stress on recovery teams while improving overall performance.

Beyond recovery, CICMG’s broader agenda is to promote responsible lending from the outset. Speaking at the 2025 Induction and Graduation Ceremony, CICMG President Evelyn Osei Tutu emphasised that poor recovery is often a symptom of weak credit assessment. She noted that institutions that fail to properly assess borrowers, monitor facilities, and enforce repayment terms ultimately undermine their own sustainability.

According to her, effective lending begins with sound credit analysis and continues through continuous monitoring and structured recovery strategies. By partnering financial institutions, SMEs, and other stakeholders, CICMG aims to ensure that credit facilities are granted responsibly and recovered efficiently, thereby strengthening trust within the financial system.

Recognising Experience to Drive Reform

As part of its reform agenda, CICMG continues to recognise seasoned credit professionals who have dedicated decades of service to Ghana’s financial industry. At the 2025 Induction and Graduation Ceremony, the Institute honoured industry veterans whose experience and institutional knowledge remain invaluable.

CICMG believes that celebrating these professionals goes beyond acknowledgment. It creates a platform for mentorship, collaboration, and knowledge transfer between experienced practitioners and younger professionals. This approach, the Institute says, is essential for building a resilient credit management profession capable of responding to evolving economic challenges.

Supporting SMEs and the Informal Sector

Non-performing loans are not confined to large financial institutions. SMEs and informal businesses also face significant challenges in managing credit and recovering debts. CICMG’s Debt Recovery School extends its services to these segments, recognising their role in Ghana’s economic development.

By equipping SMEs and informal operators with practical credit management skills, the Institute hopes to improve cash flow, reduce business failures, and support long-term sustainability. This inclusive approach also aligns with broader efforts to bring more unbanked individuals into the formal credit system while fostering disciplined borrowing habits.

Strengthening the Economy Through Credit Discipline

CICMG maintains that reducing non-performing loans is not just a sectoral issue but a national economic priority. High default rates constrain lending, increase the cost of credit, and weaken investor confidence.

Through professional recognition, capacity-building initiatives, and strategic collaboration, the Institute believes Ghana’s financial sector can achieve healthier balance sheets and improved lending outcomes.

The launch of the Debt Recovery School represents a significant step in this direction. By focusing on practical skills, responsible lending, and effective recovery strategies, CICMG is positioning itself as a key driver of credit reform. As institutions adopt these practices, the Institute is optimistic that Ghana’s credit ecosystem will become more resilient, inclusive, and supportive of sustainable economic growth.