The Bank of Ghana (BoG) has issued a strong call to commercial banks to transform the growing availability of credit into meaningful economic growth by significantly increasing financing to small and medium-sized enterprises (SMEs), agriculture and other productive sectors.
BoG Governor Dr Johnson Pandit Asiama said banks must move beyond their traditional role as financial intermediaries and become strategic partners in Ghana’s economic transformation.
He urged lenders to take advantage of improving financial conditions and the rebound in private sector credit to support businesses that drive jobs, investment and production.
BoG Demands More Productive Lending
Dr Asiama said the banking sector has a critical role to play in ensuring that Ghana’s improving economic conditions translate into stronger business activity.
According to him, banks must understand the businesses and industries they serve and develop financing products that reflect their specific operational realities.
The call comes at a time when financial conditions have eased considerably and credit creation has recorded a strong rebound. With interest margins becoming increasingly compressed, the Governor believes banks now have an opportunity to channel more resources into productive areas of the economy.
He stressed that expanding credit to productive sectors could help businesses increase their capacity, create employment and contribute more significantly to economic growth.
SMEs Still Struggling to Access Credit
Despite rising demand for financing, many SMEs continue to face significant barriers when seeking loans from financial institutions.
Dr Asiama noted that agriculture-focused SMEs are particularly affected because banks often consider them relatively high-risk borrowers.
This risk perception can make it difficult for businesses operating along agricultural value chains to secure affordable and appropriately structured financing.
The Governor therefore challenged banks to rethink their approach to SME lending instead of relying heavily on conventional loan structures that may not reflect the realities of smaller businesses.
He called for flexible credit products that take into account the unique circumstances of SMEs and the sectors in which they operate.
Agriculture Needs a Different Financing Model
Agriculture was a major focus of the Governor’s call, particularly because agricultural businesses often operate according to seasonal production and revenue cycles.
Dr Asiama urged banks to design loan repayment schedules that correspond with borrowers’ cash-flow patterns.
For farmers and agribusinesses, income may not arrive consistently every month. A business could spend several months investing in production before receiving significant revenue after harvesting or selling its products.
A rigid monthly repayment structure can therefore create unnecessary financial pressure.
The Governor said financing products designed around seasonal agricultural activities would allow businesses to access funding under terms that better reflect the realities of their operations.
Such financing could potentially strengthen agricultural value chains while supporting investment in production, processing, distribution and other related activities.
Credit Growth Creates Fresh Opportunity
The BoG Governor said the recent improvement in credit creation provides banks with an important opportunity to increase their contribution to economic activity.
Private sector credit has recorded significant growth as financial conditions have eased, creating room for banks to direct additional resources toward productive enterprises.
According to Dr Asiama, the increase in credit must not simply translate into lending activity, but should generate tangible economic value.
For SMEs, improved access to financing could mean increased production capacity, new equipment, additional employees and expanded operations.
For agriculture, stronger financing could support everything from farm inputs and machinery to processing, storage and transportation.
Banks Urged to Strengthen Customer Engagement
Beyond lending, Dr Asiama also called on banks to improve customer engagement and financial education.
He expressed concern about increased incidents of returned cheques and cases of non-compliance within the banking system.
The Governor urged banks to properly utilise approved overdraft facilities or available funds in linked accounts before returning cheques.
He also called for stronger monitoring systems and better communication with customers to reduce repeat incidents and improve confidence in cheques as a payment instrument.
According to him, stronger customer relationships can improve compliance while strengthening public confidence in banking services.
BoG Issues Warning on Digital Lending
The rapid expansion of digital finance also came under the Governor’s spotlight.
Dr Asiama urged banks to exercise heightened due diligence before partnering with digital credit service providers.
He said financial institutions must verify the licensing status of digital lenders with the BoG before entering into partnerships.
The central bank has intensified efforts to tackle unlicensed digital lending activities, including publishing the names of entities operating without the necessary approval.
The warning highlights the need for banks to ensure that innovation in financial services is accompanied by appropriate regulatory safeguards.
Diaspora Funds Seen as Untapped Opportunity
Dr Asiama also urged banks to develop dedicated investment products for Ghanaians living abroad.
Rather than focusing solely on remittance transfers, banks should create opportunities that allow diaspora funds to flow into savings and productive investments.
He encouraged banks to expand investment programmes, mobile money solutions and digital remittance platforms to deepen financial integration.
Such initiatives could help channel more diaspora resources into businesses and investments capable of supporting Ghana’s long-term development.
A New Test for Ghana’s Banks
The Governor’s call places renewed responsibility on banks to demonstrate that credit can become a powerful engine of economic transformation.
With financial conditions improving and private sector credit recovering, the banking industry now has an opportunity to support businesses that have historically struggled to secure appropriate financing.
For SMEs and agricultural enterprises, the expectation is greater access to flexible and practical credit.
For banks, the challenge is to understand their customers better, manage risks intelligently and create financing products that work with businesses rather than against them.
Dr Asiama assured the banking industry that the BoG would continue providing the regulatory and policy environment needed to support a sound, resilient and growth-oriented financial sector.
He also called for continued cooperation between the regulator and banks to address emerging challenges and unlock opportunities for businesses, households and the wider economy.
If successfully implemented, the renewed lending push could mark an important shift in Ghana’s credit market, turning increased bank liquidity and credit growth into stronger production, investment and employment.
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