Association of Ghana Industries urges creation of credit bureaus to curb bad loans
By Praisebell Rosemond Larbi
The Association of Ghana Industries (AGI) has called for the establishment of credit reference bureaus and a collateral registry as a key step towards addressing the growing challenge of non-performing loans in the country’s banking sector.
Chief Executive Officer of AGI, Seth Twum-Akwaboah, explained that embedding such mechanisms into Ghana’s lending framework would not only improve credit risk management but also enhance banks’ ability to recover loans and track repayment obligations more effectively.
Speaking during a panel discussion at the opening of National ICT Week, Mr Twum-Akwaboah stressed that small and medium-sized enterprises (SMEs) would also benefit from the reforms, provided they embrace digital systems to scale their operations.
“You may be a performing enterprise, but once you go to a bank for a loan, they are looking at the whole ecosystem. What percentage of my portfolio has gone out that I did not recover? So, I must recover it through those of you who are paying. They increase the interest rate to cover that because the Bank of Ghana requires them to cover all the loans they give out,” he said.
Mr Twum-Akwaboah noted: “Part of the reason why the cost of capital is high is because people are not performing. Digitalisation can help solve some of these problems. Introduce the credit reference bureau and the collateral registry. These are all mechanisms for helping to improve transparency and ensuring that we can track individuals. If you are not performing, deal with it, but your non-performance should not affect me to the extent of increasing my rate of interest.”
He proposed a stronger public-private partnership framework where government and industry collaborate to expand digital infrastructure.
Mr Twum-Akwaboah further stressed that driving efficiency and sharpening competitiveness across industries hinged on this reform.
The AGI’s call comes amid persistent concerns from businesses over the high cost of borrowing, which many say has become a major barrier to investment and expansion.
SMEs, which constitute the bulk of Ghana’s private sector, have particularly struggled to access affordable credit due to high interest rates and strict collateral requirements.
Meanwhile, the Governor of the Bank of Ghana, Dr Johnson Asiama, has indicated that he expects interest rates to ease into single digits before the end of his tenure.
He explained that monetary policy reforms, coupled with measures to stabilise inflation and maintain exchange rate discipline, were expected to create conditions for lower lending costs in the near future.
