Bankable Projects will Boost Private Sector Credit – BoG
The Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has identified the development of bankable projects as a key requirement for expanding private sector lending and supporting economic growth.
Speaking at the Ghana-UK Investment Summit in London, Dr. Asiama said improving access to credit for businesses and individuals remains a major priority as Ghana seeks to consolidate recent macroeconomic gains and accelerate private sector development.
According to him, private sector credit as a percentage of Gross Domestic Product (GDP) remains below levels recorded in many comparable economies, largely due to years of high interest rates and economic uncertainty that discouraged lending and investment.
He explained that banks previously lent at interest rates ranging between 35 and 40 per cent, making borrowing expensive and increasing the risk of loan defaults. As a result, many financial institutions preferred investing in government securities rather than extending credit to businesses.
However, the Governor noted that improvements in macroeconomic conditions, including declining interest rates and greater stability in the economy, are beginning to restore confidence and support a gradual recovery in private sector credit growth.
Dr. Asiama revealed that engagements with commercial banks suggest that the challenge is no longer a shortage of funds within the financial system but rather a lack of investment-ready projects capable of attracting financing.
He observed that many entrepreneurs possess innovative business ideas but often lack the technical expertise required to prepare viable business plans and proposals that meet lending requirements.
According to him, efforts are underway to address this gap through partnerships aimed at strengthening project preparation and improving the quality of investment proposals submitted to financial institutions.
The Governor disclosed that discussions involving the Ghana Venture Capital Fund and other stakeholders are focused on providing technical support to startups and small and medium-sized enterprises (SMEs) to help them transform business concepts into bankable ventures.
He also highlighted initiatives by the International Finance Corporation (IFC) designed to assist entrepreneurs in developing commercially viable projects that can secure funding from banks and investors.
Dr. Asiama stressed that improving project preparation would create more lending opportunities, stimulate enterprise growth and support job creation across the economy.
Beyond traditional lending, he said the Bank of Ghana is also promoting digital credit solutions to expand financial inclusion and improve access to financing for individuals and small businesses.
Under the initiative, entrepreneurs and traders will be able to access credit through digital platforms and mobile devices, reducing barriers associated with conventional loan application processes.
He noted that work on the required technological infrastructure is progressing steadily and expressed confidence that digital finance would help bridge existing financing gaps.
The Governor emphasised that maintaining low interest rates, exchange rate stability and a sound macroeconomic environment will be critical to sustaining credit growth and supporting productive sectors of the economy.
