Banking sector records 39% drop in credit flows
By Praisebell Rosemond Larbi
Total net credit flows in Ghana’s banking sector dropped sharply by 39 per cent year-on-year to GHS8.660 billion in August 2025, down from GHS14.247 billion recorded during the same period in 2024, according to the Bank of Ghana’s September 2025 Monetary Policy Report.
The central bank attributed the decline largely to reduced credit to the public sector, combined with a moderation in private sector lending as banks rebalanced their portfolios towards Government and Bank of Ghana securities, reflecting cautious risk management amid a tightening macroeconomic environment.
Private sector credit flows fell to GHS10.710 billion in August 2025, compared to GHS14.319 billion a year earlier.
Despite this slowdown, the private sector continued to dominate Ghana’s credit market, accounting for 95.5 per cent of total outstanding credit as of August 2025, up from 92.7 per cent recorded in August 2024.
The sectoral distribution of credit revealed that lending remained heavily concentrated in services (68.2 per cent), commerce and finance (23.8 per cent), and manufacturing (23.0 per cent).
These three segments continued to absorb the largest portion of credit inflows, reflecting their dominant roles in driving Ghana’s overall economic activity.
Outstanding credit to the private sector rose to GHS91.028 billion at the end of August 2025, compared with GHS80.318 billion at the end of August 2024, indicating nominal growth despite the overall decline in net credit flows.
In real terms, private sector credit recorded a modest expansion of 1.7 per cent, marking a recovery from a 1.1 per cent contraction in the corresponding period of 2024.
The report noted that this growth was slightly above the medium-term trend, with the deviation from trend widening marginally in August 2025 relative to the previous year.
