According to the central bank, the total amount in the books of banks classified as Non-Performing Loans (NPLs) has hit GH¢6.91 billion by August 2019. Of this amount, 97.6 percent, translating into GH¢6.7 billion is with the private sector.
Report says the private sector in Ghana accounts for 97% (GH¢6.7 billion) of the country’s bad loans
Bank of Ghana (BoG) report has shown that out of the total amount of bad loans that have become an albatross around the neck of banks in the country, the private sector alone accounts for more than 97 percent of it.
The BoG captured this in the Banking Sector Report it published for September 2019.
The NPLs from the private sector is more than the amount used to clean up the microfinance and savings and loans sectors together; and also, more than one-third of the funds used in cleaning up the entire financial sector.
Indigenous private enterprises accounted for 73.7 percent of total NPLs within the period under consideration. This indicates that companies owned by Ghanaians owe banks more than GH¢5 billion; whereas foreign-owned companies owe GH¢1.8 billion, representing only 8.5 percent of total NPLs.
The report further said the share of private sector credit in total advancements declined marginally to 90.4 percent in August 2019 from 92.4 percent in August 2018.
Meanwhile, the share of credit to the public sector increased during the review period to 9.6 percent in August 2019 from 7.6 percent in August 2018. The increase was reflected in all components of public sector credit namely credit to the government, public institutions and public enterprises.
The share of credit to government, the report said, went up to 3.7 percent in August 2019 from 2.7 percent in August 2018; the share of loans to public institutions went up to 1.5 percent from 0.9 percent; while the proportion of public enterprises’ credit in total credit increased to 4.4 percent from 4 percent over the same review period.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: