BoG cracks down on Wilful Defaulters in new measures to cut non-performing loans

The Bank of Ghana (BoG) has announced stringent measures aimed at tackling rising levels of Non-Performing Loans (NPLs) in the financial sector, including barring wilful defaulters from accessing credit for up to five years and reporting them to the Financial Intelligence Centre.

The directive, issued to all regulated financial institutions (RFIs) — including banks, specialised deposit-taking institutions (SDIs), and non-bank financial institutions (NBFIs) — is part of a broader effort to stabilise Ghana’s financial system and improve credit discipline.

Under the new rules, RFIs must reduce their NPL ratios to a maximum of 10% by December 2026. Institutions that fail to meet this target will face serious consequences, including restrictions on dividend payouts, limits on loan book expansion, and curbs on other business activities.

As part of the enforcement mechanisms, the BoG has ordered:

Immediate write-off of fully provisioned bad loans.

Mandatory publication of names of wilful defaulters in at least two national newspapers and on financial institutions’ websites.

Enhanced credit risk management, including independent credit reviews, early-stage recovery strategies, and accurate reporting to credit bureaus.

Disqualification and potential forced divestment for directors and shareholders associated with non-performing insider loans.

The central bank emphasised that these measures are consistent with international regulatory standards and are essential for safeguarding financial stability.

“These actions are necessary to protect the financial system and improve credit discipline across the sector,” the BoG stated.

Industry analysts say the policy could restore lender confidence and promote responsible borrowing, though successful implementation will depend on strict compliance and consistent regulatory oversight.