The Quarterly Collateral Registry Brief report of the third quarter of 2024 (Q3 2024) revealed a notable shift in the allocation of loans, particularly in the Greater Accra region.

According to the Quarterly Collateral Registry Brief, Greater Accra’s share of the total value of secured loans granted by banks and Specialized Deposit-Taking Institutions (SDIs) declined from 75.7% in Q3 2023 to 62.8% in Q3 2024—a 12.9% decrease.

This drop, while significant, underscores the evolving economic dynamics across Ghana’s regions and raises questions about what factors contributed to the redistribution of secured loans.

Greater Accra has traditionally dominated secured loan allocations due to its status as Ghana’s economic hub. Home to a significant concentration of businesses, industries, and financial institutions, the region has consistently accounted for the lion’s share of the country’s secured loans. However, the 12.9% reduction in its share this year suggests a diversification of economic activities or, potentially, a slowdown in credit uptake within the region.

This change does not necessarily indicate a decline in economic vibrancy in Greater Accra but could point to increased competition for credit from other regions or a deliberate shift in lending strategies by financial institutions.

Regional Distribution Trends

Following Greater Accra, the Ashanti and Western regions claimed the second and third-largest shares of secured loans in Q3 2024, with 19.2% and 4.8%, respectively. Together, these three regions accounted for over 80% of the total value of secured loans granted during the period, emphasizing their collective dominance in Ghana’s economic structure.

At the other end of the spectrum, the Oti and North East regions received the lowest shares of secured loans, at 0.02% and 0.01%, respectively. These disparities highlight the uneven distribution of economic activity and financial access across the country.

The report attributed the variations in loan allocation primarily to differences in economic activity across regions. Greater Accra’s vast urbanization, concentration of corporate headquarters, and robust infrastructure naturally make it a magnet for secured loans. Conversely, less-developed regions like Oti and North East face challenges such as lower levels of industrialization, limited business expansion, and fewer financial service providers, which impede their ability to attract significant loan volumes.

Another factor could be the lending policies of banks and SDIs. Financial institutions often prioritize regions with lower credit risks and higher chances of loan repayment. Greater Accra, Ashanti, and Western regions, with their relatively diversified economies and established business environments, may continue to benefit from these preferences.

Banking Sector Performance in Secured Loans

A closer look at the banking sector revealed that five banks accounted for over 50% of the total value of secured loans in Q3 2024. GCB Bank PLC led the pack with a 16.4% share, followed by Consolidated Bank Ghana Limited (10.9%), Zenith Bank (8.1%), Ecobank Ghana Ltd. (8.0%), and Guaranty Trust Bank Ltd. (7.6%).

Interestingly, the United Bank for Africa Ghana Limited (UBA) and National Investment Bank (NIB) recorded the lowest shares among the major banks, with 0.6% and 0.3%, respectively. These figures highlight the varying levels of competitiveness and market penetration among financial institutions in Ghana’s secured loan market.

The reduction in Greater Accra’s share of secured loans could have far-reaching implications for regional development and financial inclusion. On the one hand, it may signify progress in decentralizing economic activities, allowing other regions to access more credit and stimulate growth. On the other hand, it could reflect underlying challenges in Greater Accra’s economic environment, such as tighter credit policies, reduced demand, or shifting priorities of lenders.

The disparities in secured loan allocation also emphasize the need for policies that promote balanced economic growth across all regions. Governments, financial institutions, and development partners must collaborate to enhance credit accessibility in underrepresented regions like Oti and North East. Initiatives such as improving infrastructure, supporting SMEs, and expanding financial literacy programs could play a crucial role in narrowing these gaps.

The 12.9% decline in Greater Accra’s share may be a sign of progress—or a challenge to overcome—but it undeniably reflects the shifting tides of Ghana’s financial sector.